<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 16, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
APPLIED MATERIALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-1655526
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
3050 BOWERS AVENUE, SANTA CLARA, CALIFORNIA 95054, (408) 727-5555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES C. MORGAN
CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
APPLIED MATERIALS, INC.
3050 BOWERS AVENUE, SANTA CLARA, CALIFORNIA 95054, (408) 727-5555
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
DONALD A. SLICHTER, ESQ. MARK A. BERTELSEN, ESQ.
DANA M. KETCHAM, ESQ. JOHN A. FORE, ESQ.
SCOTT D. ELLIOTT, ESQ. WILSON, SONSINI, GOODRICH & ROSATI
ORRICK, HERRINGTON & SUTCLIFFE PROFESSIONAL CORPORATION
400 SANSOME STREET 650 PAGE MILL ROAD
SAN FRANCISCO, CALIFORNIA 94111 PALO ALTO, CALIFORNIA 94304
</TABLE>
------------------------
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 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, please 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, please 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>
<S> <C> <C>
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PROPOSED
MAXIMUM
AGGREGATE
TITLE OF EACH CLASS OF SECURITIES OFFERING AMOUNT OF
TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
Debt Securities and Common Stock, par value $0.01 per share (3)(4)......... $564,844,000 $194,776
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Or, (i) if any Debt Securities are issued at an original issue discount,
such greater principal amount as shall result in an aggregate initial
offering price equal to the amount to be registered or (ii) if any Debt
Securities are issued with a principal amount denominated in a foreign
currency or composite currency, such principal amount as shall result in an
aggregate initial offering price equivalent thereto in United States dollars
at the time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest, if
any on the on the Debt Securities.
(3) Includes Rights to purchase Common Stock which, prior to certain events,
will not be exercisable or evidenced separately from the Common Stock.
(4) Pursuant to Rule 429, Debt Securities and Common Stock having an aggregate
initial offering price of $35,156,000 are being carried forward from
Registration Statement No. 33-52471. $12,123 of the filing fee previously
paid in connection with such registration statement is associated with these
securities.
------------------------
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 OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
------------------------
PURSUANT TO RULE 429, THE PROSPECTUS HEREIN ALSO RELATES TO AN UNALLOCATED
AMOUNT OF DEBT SECURITIES AND COMMON STOCK HAVING AN AGGREGATE INITIAL OFFERING
PRICE OF $35,156,000 THAT HAVE NOT YET BEEN OFFERED FOR SALE UNDER REGISTRATION
STATEMENT NO. 33-52471 ON FORM S-3. PURSUANT TO RULE 457(O), NO ADDITIONAL
FILING FEE IS DUE WITH RESPECT TO THESE SECURITIES SINCE THE ORIGINAL FILING
FEES FOR REGISTRATION STATEMENT NO. 33-52471 WERE BASED ON THE MAXIMUM OFFERING
PRICE OF ALL THE SECURITIES COVERED.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
PROSPECTUS SUPPLEMENT (Subject to Completion, Issued June , 1995)
(To Prospectus Dated June , 1995)
3,500,000 Shares
(LOGO) APPLIED MATERIALS
COMMON STOCK
------------------------
ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY APPLIED
MATERIALS, INC. (THE "COMPANY"). THE COMPANY'S COMMON STOCK IS TRADED IN
THE OVER-THE-COUNTER MARKET UNDER THE NASDAQ NATIONAL MARKET
SYMBOL "AMAT." THE LAST SALE PRICE FOR THE COMMON STOCK ON
JUNE , 1995, AS REPORTED ON THE NASDAQ NATIONAL
MARKET, WAS $ PER SHARE. SEE "PRICE
RANGE OF COMMON STOCK."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
PRICE $ A SHARE
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Per Share........................ $ $ $
Total(3)......................... $ $ $
</TABLE>
- ------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriters."
(2) Before deducting expenses payable by the Company estimated at $315,000.
(3) The Company has granted to the Underwriters an option, exercisable within 30
days of the date hereof, to purchase up to an aggregate of 525,000
additional Shares at the price to public less underwriting discounts and
commissions for the purpose of covering over-allotments, if any. If the
Underwriters exercise such option in full, the total price to public,
underwriting discounts and commissions and proceeds to Company will be
$ , $ and $ , respectively. See
"Underwriters."
------------------------
The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriters named herein and subject to approval of certain legal matters
by Wilson Sonsini Goodrich & Rosati, counsel for the Underwriters. It is
expected that delivery of the Shares will be made on or about June , 1995 at
the offices of Morgan Stanley & Co. Incorporated, New York, N.Y. against payment
therefor in New York funds.
------------------------
MORGAN STANLEY & CO.
Incorporated
LEHMAN BROTHERS
COWEN & COMPANY
NEEDHAM & COMPANY, INC.
ROBERTSON, STEPHENS & COMPANY
June , 1995
<PAGE> 3
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS, AND ANY INFORMATION OR
REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS
SUPPLEMENT OR PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR
SUCH PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS AT ANY TIME NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
The Company.......................................................................... S-3
Use of Proceeds...................................................................... S-6
Price Range of Common Stock.......................................................... S-7
Dividend Policy...................................................................... S-7
Capitalization....................................................................... S-8
Selected Consolidated Financial Data................................................. S-9
Underwriters......................................................................... S-11
Legal Opinions....................................................................... S-12
PROSPECTUS
Available Information................................................................ 2
Information Incorporated by Reference................................................ 2
The Company.......................................................................... 3
Use of Proceeds...................................................................... 3
Ratio of Earnings to Fixed Charges................................................... 3
Description of Debt Securities....................................................... 4
Description of Capital Stock......................................................... 12
Plan of Distribution................................................................. 16
Legal Opinions....................................................................... 16
Experts.............................................................................. 16
</TABLE>
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITERS."
S-2
<PAGE> 4
THE COMPANY
Organized in 1967, Applied Materials, Inc. ("Applied Materials" or the
"Company") develops, manufactures, markets and services semiconductor wafer
fabrication equipment and related spare parts. The Company's worldwide customers
include both companies which manufacture semiconductor devices for use in their
own products and companies which manufacture semiconductor devices for sale to
others. The Company operates exclusively in the semiconductor wafer fabrication
equipment industry. The Company is also a fifty percent stockholder in Applied
Komatsu Technology, Inc., which produces thin film transistor manufacturing
systems for active-matrix liquid crystal displays.
PRODUCTS
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate management, process control, software and automation. Many of these
technologies are complementary and can be applied across all of the Company's
products. The Company's products provide enabling technology, productivity and
yield enhancements to semiconductor manufacturers. The Company's products are
used to fabricate semiconductor devices on a substrate of semiconductor material
(primarily silicon). A finished device consists of thin film layers which can
form anywhere from one to millions of tiny electronic components that combine to
perform desired electrical functions. The fabrication process must control film
and feature quality to ensure proper device performance while meeting yield and
throughput goals. The Company currently manufactures equipment that addresses
three major steps in wafer fabrication: deposition, etch and ion implantation.
Single-wafer, multi-chamber architecture. The trend toward more stringent
process requirements and larger wafer sizes prompted Applied Materials to
develop the single-wafer, multi-chamber system called the Precision 5000. The
Company introduced the Precision 5000 with chemical vapor deposition (CVD)
dielectric processes in 1987, etch processes in 1988 and CVD tungsten processes
(WCVD) in 1989. The Precision 5000's single-wafer, multi-chamber architecture
which features several processing chambers, each of which is attached to a
central handling system, is designed for both serial and integrated processing.
The Precision 5000's integrated processing capability makes it possible to
perform multiple process steps on the wafer without leaving a controlled
environment, thus reducing the risk of particulate contamination. The Company
leveraged its expertise in single-wafer, multi-chamber architecture to develop
an evolutionary platform called the Endura 5500 PVD (physical vapor deposition)
in 1990 featuring a staged, ultra-high vacuum architecture. In October 1991, the
Company announced its second generation Precision 5000 system, the Precision
5000 Mark II, with numerous enhancements to the platform, process chambers and
remote support equipment. The Precision 5000 Mark II addresses customers'
demands in the manufacturing of advanced devices, such as 16 megabit DRAMs
(dynamic random access memories) and the use of 200mm (8-inch) wafers. In
September 1992, the Company announced its latest generation single-wafer, multi-
chamber platform, the Centura, to target the high temperature thin films market
as well as future process applications with 0.5-micron and below specifications.
The Company has shipped more than 2,500 platforms and more than 7,600 process
chambers. For the six months ended April 30, 1995, sales of the Company's
single-wafer, multi-chamber systems accounted for approximately 91% of systems
revenue.
Deposition. A fundamental step in fabricating a semiconductor device,
deposition is a process in which a layer of either electrically insulating
(dielectric) or electrically conductive material is deposited on the wafer.
Deposition can be divided into several different categories of which Applied
Materials currently participates in three: chemical vapor deposition (CVD),
physical vapor deposition (PVD), and epitaxial and polysilicon deposition.
CVD. Chemical vapor deposition is a process used in semiconductor
fabrication in which thin films (insulators, conductors and semiconductors)
are deposited from vapor (gaseous) phase sources. The Company produces
several different types of CVD systems. In 1987, the Company introduced the
Precision 5000 CVD which, with its automated multi-chamber architecture,
provides the flexibility to perform a broad range of deposition processes
utilizing up to four individual chambers on a single system. In 1989, the
Company entered the market for metal chemical vapor deposition with the
introduction of a
S-3
<PAGE> 5
new system for blanket tungsten deposition, the Precision 5000 WCVD. This
system is based on the single-wafer, multi-chamber Precision 5000 CVD
system architecture and is designed to reduce operating costs for tungsten
deposition and to produce high-quality tungsten films for interconnect
applications in advanced semiconductor devices. In 1990, the Company
introduced integrated tungsten plug fabrication capability by combining its
blanket tungsten CVD deposition and etchback capabilities onto the same
system. In 1991, the Company introduced tungsten silicide capabilities and
in 1993, titanium nitride (TiN) capabilities to further extend the
Precision 5000 platform offerings. The Company released its newest
generation of sub-atmospheric process technology on the Precision 5000 Mark
II CVD platform in April 1994, addressing applications to 0.35-microns. In
May 1994, the Company introduced a new multi-platform chamber for blanket
tungsten deposition on wafers up to 200mm (8-inch) in diameter. In 1995,
the Company introduced a new CVD process for tungsten silicide using
dichlorosilane as the silicon source gas as well as announced a significant
enhancement to its Precision 5000 CVD system that improves system
throughput and reduces ownership costs. In addition, the Company announced
in April 1995 its entry into the Pre-Metal CVD market, using the Company's
Sub-Atmospheric CVD technology to deposit Borophosphosilicate glass films.
PVD. Physical vapor deposition sputters metals on wafers to form the
circuit interconnects. Unlike CVD, the sources of the deposited materials
are solid sources called targets. Applied Materials first entered the PVD
market in April 1990 with the Endura 5500 PVD system. The system offers a
modular, single-wafer, multi-chamber platform which will accommodate both
ultra-high vacuum processes like PVD, and conventional high vacuum
processes like CVD and etch. In July 1993, the Company introduced the
Endura HP (High Productivity) PVD system, an enhanced version of its Endura
PVD system. In November 1993, the Centura HP PVD system was introduced in
order to offer customers a choice of platforms using the Company's PVD
technology. In November 1994, the Endura VHP (Very High Productivity) PVD
system was launched, further enhancing the wafer transfer system to raise
throughput.
Epitaxial and polysilicon deposition. Epitaxial and polysilicon
deposition involve depositing a layer of high-quality, silicon based
compounds on the surface of an existing silicon wafer to change its
electrical properties and form the base on which the integrated circuit is
built. In 1989, the Company introduced the Precision 7700 Epi system for
advanced silicon deposition. The 7700 system extends the capabilities of
radiantly-heated barrel technology and incorporates fully automated wafer
handling as well as many features for particulate control. In September
1992, the Company announced the Centura Poly, a single-wafer, multi-chamber
platform targeted at the high temperature thin film deposition of
polysilicon on wafers up to 200mm (8-inch) in diameter. The Centura Epi
system, which features deposition of epitaxial silicon, was announced in
March 1993. In December 1993, the Company launched the Centura Polycide
which combines chambers for polysilicon and tungsten silicide deposition on
the Centura platform.
Etch. Prior to etch processing, a wafer is patterned with photoresist
during photolithography. Etching then selectively removes material from areas
which are not covered by the photoresist pattern. Applied Materials entered the
etch market in 1981 with the introduction of the AME 8100 etch system, which
utilized a batch process technology for dry plasma etching. In 1985, the Company
introduced the Precision Etch 8300, which featured improved levels of automation
and particulate control. The Company continues to sell the Precision Etch 8300
product and has shipped approximately 865 systems. Applied Materials' first
single-wafer, multi-chamber system for the dry etch market was the Precision
5000 Etch, introduced in 1988. In 1990, the Company introduced a metal etch
system based on the Precision 5000 architecture which provides single-wafer
aluminum etch capabilities. In July 1993, the Company introduced its next
generation etch platform, the Centura HDP Dielectric Etcher designed for
applications requiring sub-0.5-micron design rules. This announcement was soon
followed by the October 1993 introduction of the Precision 5000 Mark II Etch
MxP, a new model of the Precision 5000-series etch system with several
enhancements including process capability for 0.35-micron applications. In July
1994, Applied Materials introduced the Metal Etch MxP Centura, which combines
sub-0.5-micron process technology with improved throughput. The Company launched
a new
S-4
<PAGE> 6
dielectric etch system in April 1995, combining its latest Centura platform with
an enhanced etch chamber, called the MxP "Plus".
Ion Implantation. During ion implantation, silicon wafers are bombarded by
a high velocity beam of electrically charged ions. These ions are embedded
within the wafer at selected sites and change the electrical properties of the
implanted area. Applied Materials entered the high-current portion of the
implant market in 1985 with the Precision Implant 9000 and introduced the
Precision Implant 9200 in 1988. In 1989, the Company added enhancements to the
9200 series including a new option for automated selection of implant angles,
and new hardware/software options that enable customers to perform remote
monitoring and diagnostics. In 1991, the Company announced an enhanced version
of its high-current ion implanter and designated it the Precision Implant
9200XJ. In November 1992, the Company introduced a new high-current ion
implantation system, the Precision Implant 9500, to address the production of
high density semiconductor devices, such as 16 and 64 MB memory devices and
advanced microprocessors. In November 1994, the 9500 xR model was introduced,
further extending the range of the 9500 system into the traditional
medium-current area with enhanced low-dose, low-energy implant performance.
CUSTOMER SERVICE AND SUPPORT
The demand for improved production yields of integrated circuits requires
that semiconductor wafer processing equipment operate reliably, with maximum
uptime and within very precise tolerances. Applied Materials installs equipment
and provides warranty service worldwide through offices located in the United
States, Japan, Europe and the Asia-Pacific region (Korea, Taiwan, China and
Singapore). Applied Materials maintains 60 service/sales offices worldwide, with
15 of those in Japan, 9 offices in Europe, 10 offices in the Asia-Pacific region
and the remainder in the United States. The Company offers a variety of service
contracts to customers for maintenance of installed equipment and provides a
comprehensive training program for all customers.
MARKETING AND SALES
Because of the highly technical nature of its products, the Company markets
its products worldwide through a direct sales force, with sales, service and
spare parts offices in the United States, Japan, Europe and the Asia-Pacific
region. For the fiscal year ended October 30, 1994, sales to customers in the
United States, Japan, Europe and Asia-Pacific accounted for approximately 37%,
27%, 18% and 18%, respectively, of the Company's net sales. For the six months
ended April 30, 1995, sales to customers in the United States, Japan, Europe and
Asia-Pacific accounted for approximately 37%, 22%, 12% and 29%, respectively, of
the Company's net sales. The Company's business is not considered to be seasonal
in nature, but it is dependent upon the capital equipment expenditure patterns
of major semiconductor manufacturers. These expenditure patterns are based on
many factors including anticipated market demand for integrated circuits, the
development of new technologies, and global economic conditions.
RESEARCH AND DEVELOPMENT
The market served by the Company is characterized by rapid technological
change. The Company's research and development efforts are global in nature.
Engineering organizations are located in the United States, England, Israel and
Japan, with process support and customer demonstration laboratories in the
United States and Japan. In 1991, the Company announced the opening of a new
technology center in Narita, Japan. The Company is currently building, and
intends to operate, applications laboratories in South Korea and Taiwan. The
Company also operates a technology center in Israel which is being used to
develop controller configuration and software tools for its semiconductor
processing systems. Applied Materials' research and development activities are
primarily directed toward the development of new wafer processing systems and
new process applications for existing products. Applied Materials works closely
with its global customers to design its systems to meet its customers' planned
technical and production requirements.
S-5
<PAGE> 7
The Company intends to introduce, in the very near future, a rapid thermal
processing (RTP) system. This technology employs radiant energy directed on a
wafer at high temperatures for a short duration to achieve implant annealing,
silicide formation and thin oxide growth.
JOINT VENTURE
In September 1991, the Company announced its plans to develop thin film
transistor (TFT) manufacturing systems for Active-Matrix Liquid Crystal Displays
(AMLCDs). The AMLCD market currently includes screens for laptop, notebook and
palmtop computers and instrument displays, and the Company believes in the
future may include high-resolution workstations and High Definition Television
(HDTV). In September 1993, a joint venture company was formed with Applied
Materials, Inc. and Komatsu Ltd. of Japan sharing a 50-50 ownership of the joint
venture. The joint venture, Applied Komatsu Technology, Inc. (AKT), is accounted
for using the equity method. The Company's management believes that systems
developed by AKT have the potential to lower the manufacturing costs of AMLCDs.
The Company has granted to AKT an exclusive license to use the Company's
intellectual property to develop, make, and sell products for the manufacture of
flat panel displays, in exchange for royalties in respect thereof. AKT
anticipates accelerating its investment in product technologies for both PVD and
Etch in addition to expanding the substrate size of its CVD product in fiscal
1995 and 1996.
------------------------
The Company was incorporated in California in 1967 and reincorporated in
Delaware in 1987. Its principal executive offices are located at 3050 Bowers
Avenue, Santa Clara, California 95054-3299 (telephone number (408) 727-5555).
References to the Company or to Applied Materials shall mean Applied Materials,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Applied Materials, Precision 5000 and Endura are registered trademarks of
Applied Materials, Inc. Centura, Endura 5500 PVD, Precision 5000 Mark II,
Precision 5000 CVD, Precision 5000 WCVD, Endura HP PVD, VHP, Precision 7700 Epi,
Centura Poly, Centura Polycide, Centura Epi, AME 8100, Precision Etch 8300,
Centura HDP Dielectic Etch, Precision 5000 Mark II Etch MxP, Precision 5000 Mark
II CVD, Metal Etch MxP Centura, Precision Implant 9000, Precision Implant 9200,
Precision Implant 9200XJ, Precision Implant 9500 and Precision Implant 9500 xR
are trademarks of Applied Materials, Inc. Applied Komatsu Technology is a
trademark of Applied Komatsu Technology, Inc.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Common
Stock offered hereby are estimated to be $ ($ if the
Underwriters' over-allotment option is exercised in full), assuming a public
offering price of $ per share and after deducting estimated underwriting
discounts and commissions and expenses of the offering. The net proceeds will be
used for general corporate purposes, including increases in working capital and
expansion of facilities. The Company believes that success in its industry
requires substantial financial strength and flexibility. In addition, the
Company from time to time considers acquisitions of complementary businesses,
assets or technologies, and although there are no current agreements or
understandings with respect to any such acquisitions, the Company desires to be
able to respond to opportunities as they arise. The Company is not negotiating,
discussing or planning any potential acquisition at this time. Pending such
uses, the Company will invest the net proceeds in investment-grade, interest-
bearing securities.
S-6
<PAGE> 8
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on The Nasdaq National Market under
the symbol AMAT. The following table sets forth the range of high and low
closing sales prices of the Company's Common Stock for the indicated periods, as
reported on The Nasdaq National Market. All prices have been restated to reflect
a two-for-one stock split in the form of a 100% stock dividend effective October
5, 1993.
<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
------------------------------------------------------------------ ---- ------
<S> <C> <C>
1993:
First Quarter................................................... $19 3/8 $14 7/16
Second Quarter.................................................. 22 5/8 17 1/2
Third Quarter................................................... 33 21 1/2
Fourth Quarter.................................................. 39 1/4 28 5/8
1994:
First Quarter................................................... 43 3/4 30
Second Quarter.................................................. 51 3/4 37 5/8
Third Quarter................................................... 49 1/8 38 3/4
Fourth Quarter.................................................. 52 1/2 43
1995:
First Quarter................................................... 52 1/2 39
Second Quarter.................................................. 61 5/8 38 1/2
Third Quarter (through June , 1995)........................... 84 1/4 60 1/8
</TABLE>
On June , 1995, the last reported sale price for the Common Stock on The
Nasdaq National Market was $ per share.
DIVIDEND POLICY
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business. Certain of the Company's debt
agreements limit the Company's ability to pay dividends on its Common Stock.
S-7
<PAGE> 9
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of April 30, 1995, and as adjusted to give effect to the sale by the
Company of the shares of Common Stock offered hereby, assuming a public offering
price of $ per share, the application of the estimated net proceeds
therefrom and no exercise of the Underwriters' over-allotment option:
<TABLE>
<CAPTION>
AS OF APRIL 30, 1995
-----------------------------
ACTUAL AS ADJUSTED(1)
---------- --------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable........................................ $ 45,190 $ 45,190
Current portion of long-term debt.................... 24,577 24,577
----------- -----------
Total short-term debt............................. $ 69,767 $ 69,767
=========== ===========
Long-term debt:
Secured Japanese debt................................ $ 87,243 $ 87,243
Unsecured senior notes............................... 52,500 52,500
Noncallable unsecured senior notes................... 100,000 100,000
----------- -----------
Total long-term debt.............................. 239,743 239,743
----------- -----------
Stockholders' equity:
Preferred Stock; $0.01 par value; 1,000 shares
authorized;
no shares issued.................................. -- --
Common Stock; $0.01 par value; 200,000 shares
authorized(2); 84,744 shares issued and
outstanding; 88,244 shares outstanding as
adjusted.......................................... 847 882
Additional paid-in capital........................... 395,109
Retained earnings.................................... 705,369 705,369
Cumulative translation adjustments................... 49,094 49,094
----------- -----------
Total stockholders' equity........................ 1,150,419
----------- -----------
Total capitalization.............................. $1,390,162 $
=========== ===========
</TABLE>
- ------------
(1) The Company currently intends to commence a program for the sale to the
public from time to time of up to $300,000,000 of unsecured senior debt
securities, which may include medium-term notes, with maturities ranging
from nine months to 30 years. For a description of certain terms of the debt
securities, see "Description of Debt Securities" in the accompanying
Prospectus. The as adjusted number does not reflect the sale of the debt
securities. No assurances can be given that the sale of the debt securities
will occur.
(2) Of the authorized shares, as of April 30, 1995, an aggregate of
approximately 6,232,000 shares of Common Stock were reserved for issuance
upon exercise of outstanding options and an aggregate of approximately
6,189,000 shares of Common Stock were available for future grants under the
Company's stock option plans. As of June 7, 1995, options to purchase
1,217,000 shares of Common Stock are currently exercisable at a weighted
average exercise price of $10.82 per share. Between June 8, 1995 and July
15, 1995, options to purchase an additional 1,296,000 shares of Common Stock
become exercisable at a weighted average exercise price of $11.92 per share.
See "Underwriters."
S-8
<PAGE> 10
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended October 30, 1994 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse LLP, independent accountants. The selected
consolidated financial data presented below as of and for the six month periods
ended April 30, 1995 and May 1, 1994, and for each of the six fiscal quarters
ended April 30, 1995 have been derived from unaudited interim consolidated
financial information of the Company. In the opinion of management, the
unaudited interim consolidated financial information have been prepared on the
same basis as the audited consolidated financial statements and include all
adjustments, consisting of only normal recurring adjustments, necessary to
fairly state the information set forth therein. The results of operations for
the six months ended April 30, 1995 are not necessarily indicative of the
results to be expected for the fiscal year ending October 29, 1995. This data
should be read in conjunction with the more detailed information and
consolidated financial statements and notes thereto incorporated by reference in
the accompanying Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------- FISCAL YEAR ENDED(1)
APRIL 30, MAY 1, --------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(2):
Net sales................................. $1,181,547 $ 751,781 $1,659,807 $1,080,047 $751,383 $638,606 $567,130
Costs and expenses:
Cost of products sold................... 638,525 406,411 891,512 604,363 443,179 370,025 302,001
Research, development and engineering... 133,389 82,892 189,126 140,161 109,196 102,665 97,066
Marketing and selling................... 96,046 73,403 157,303 107,275 78,141 70,416 68,238
General and administrative.............. 64,987 40,221 84,744 64,379 48,242 42,812 40,875
Other, net.............................. 1,653 114 (2,115) 2,875 4,249 3,316 3,116
---------- -------- ---------- ---------- -------- -------- --------
Income from operations.................... 246,947 148,740 339,237 160,994 68,376 49,372 55,834
Interest expense........................ 11,634 7,120 15,962 14,206 15,207 13,969 6,717
Interest income......................... 9,983 4,268 11,222 6,770 5,756 4,952 4,967
---------- -------- ---------- ---------- -------- -------- --------
Income from consolidated companies before
taxes and cumulative effect of
accounting change....................... 245,296 145,888 334,497 153,558 58,925 40,355 54,084
Provision for income taxes................ 85,853 51,061 117,074 50,674 19,445 14,124 20,011
---------- -------- ---------- ---------- -------- -------- --------
Income from consolidated companies before
cumulative effect of accounting
change.................................. 159,443 94,827 217,423 102,884 39,480 26,231 34,073
Equity in net loss of joint venture....... -- 2,365 3,727 3,189 -- -- --
---------- -------- ---------- ---------- -------- -------- --------
Income before cumulative effect of
accounting change....................... 159,443 92,462 213,696 99,695 39,480 26,231 34,073
Cumulative effect of a change in
accounting for income taxes............. -- 7,000 7,000 -- -- -- --
---------- -------- ---------- ---------- -------- -------- --------
Net income................................ $ 159,443 $ 99,462 $ 220,696 $ 99,695 $ 39,480 $ 26,231 $ 34,073
========== ======== ========== ========== ======== ======== ========
EARNINGS PER SHARE:
Income before cumulative effect of
accounting change..................... $ 1.84 $ 1.10 $ 2.51 $ 1.21 $ 0.54 $ 0.38 $ 0.50
========== ======== ========== ========== ======== ======== ========
Net income.............................. $ 1.84 $ 1.18 $ 2.60 $ 1.21 $ 0.54 $ 0.38 $ 0.50
========== ======== ========== ========== ======== ======== ========
Average common shares and equivalents .... 86,505 83,979 85,021 82,294 72,680 68,900 68,144
========== ======== ========== ========== ======== ======== ========
BALANCE SHEET DATA (AT PERIOD END):
Cash and short-term investments........... $ 404,360 $ 329,123 $ 422,325 $ 266,180 $222,670 $140,134 $ 72,016
Accounts receivable, net.................. 587,292 337,291 405,813 256,020 191,510 152,787 147,267
Inventories............................... 342,732 207,189 245,710 154,597 110,667 101,471 102,272
Total current assets...................... 1,507,066 988,025 1,230,537 775,916 581,797 434,199 366,894
Property, plant and equipment, net........ 522,933 357,495 452,454 327,704 258,521 213,231 181,494
Total assets.............................. 2,052,156 1,361,012 1,702,665 1,120,152 853,822 660,756 558,009
Short-term debt........................... 69,767 50,612 58,513 48,662 33,947 36,704 27,413
Total current liabilities................. 623,004 420,259 496,433 380,528 248,207 199,988 195,238
Long-term debt............................ 239,743 110,730 209,114 121,076 118,445 123,967 53,611
Stockholders' equity...................... 1,150,419 805,227 966,264 598,762 474,111 325,454 300,308
</TABLE>
- ------------
(1) The Company's fiscal year ends on the last Sunday of October.
(2) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective April
6, 1992, and an additional two-for-one stock split in the form of a 100%
stock dividend effective October 5, 1993.
S-9
<PAGE> 11
SELECTED CONSOLIDATED FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------------------
APR. 30, JAN. 29, OCT. 30, JULY 31, MAY 1, JAN. 30,
1995 1995 1994 1994 1994 1994
-------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $675,439 $506,108 $467,798 $440,228 $411,332 $340,449
Costs and expenses:
Cost of products sold............ 370,429 268,096 250,445 234,656 221,941 184,470
Research, development and
engineering................... 73,393 59,996 53,740 52,494 43,654 39,238
Marketing and selling............ 51,901 44,145 44,049 39,851 39,370 34,033
General and administrative....... 34,963 30,024 24,244 20,279 20,489 19,732
Other, net....................... (141) 1,794 (2,930) 701 (541) 655
-------- -------- -------- -------- -------- --------
Income from operations............. 144,894 102,053 98,250 92,247 86,419 62,321
Interest expense................. 5,881 5,582 5,183 3,659 3,472 3,648
Interest income.................. 5,040 4,772 4,008 2,946 2,261 2,007
-------- -------- -------- -------- -------- --------
Income from consolidated companies
before taxes and cumulative
effect of accounting change...... 144,053 101,243 97,075 91,534 85,208 60,680
Provision for income taxes......... 50,418 35,435 33,977 32,036 29,823 21,238
-------- -------- -------- -------- -------- --------
Income from consolidated companies
before cumulative effect of
accounting change................ 93,635 65,808 63,098 59,498 55,385 39,442
Equity in net loss of joint
venture.......................... -- -- -- 1,362 314 2,051
-------- -------- -------- -------- -------- --------
Income before cumulative effect of
accounting change................ 93,635 65,808 63,098 58,136 55,071 37,391
Cumulative effect of a change in
accounting for income taxes...... -- -- -- -- -- 7,000
-------- -------- -------- -------- -------- --------
Net income......................... $ 93,635 $ 65,808 $ 63,098 $ 58,136 $ 55,071 $ 44,391
======== ======== ======== ======== ======== ========
Earnings per share:
Income before cumulative effect
of accounting change.......... $ 1.08 $ 0.76 $ 0.73 $ 0.68 $ 0.65 $ 0.45
======== ======== ======== ======== ======== ========
Net income....................... $ 1.08 $ 0.76 $ 0.73 $ 0.68 $ 0.65 $ 0.53
======== ======== ======== ======== ======== ========
Average common shares and
equivalents...................... 86,703 86,308 86,330 86,033 84,761 83,245
======== ======== ======== ======== ======== ========
</TABLE>
S-10
<PAGE> 12
UNDERWRITERS
Under the terms and subject to conditions contained in an Underwriting
Agreement dated the date hereof, each of the Underwriters named below have
severally agreed to purchase, and the Company has agreed to sell to them, the
number of shares of the Company's Common Stock set forth opposite their
respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
Morgan Stanley & Co. Incorporated.........................................
Lehman Brothers Inc. .....................................................
Cowen & Company...........................................................
Needham & Company, Inc. ..................................................
Robertson, Stephens & Company, L.P. ......................................
---------
Total........................................................... 3,500,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to take
and pay for all of the shares of Common Stock offered hereby (other than those
covered by the over-allotment option described below) if any such shares are
taken.
The Underwriters initially propose to offer part of the shares directly to
the public at the public offering price set forth on the cover page hereof and
part to certain dealers at a price which represents a concession not in excess
of $ a share under the public offering price. Any Underwriter may
allow, and such dealers may reallow, a concession not in excess of $ a
share to certain other dealers. After the public offering, the public offering
price, the concession to selected dealers and the reallowance to other dealers
may be changed by the Underwriters.
The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus Supplement, to purchase up to an
additional 525,000 shares of Common Stock at the public offering price set forth
on the cover page hereof, less underwriting discounts and commissions. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with this offering. To the extent
such option is exercised, each Underwriter will become obligated, subject to
certain conditions, to purchase approximately the same percentage of such
additional shares as the number set forth next to such Underwriter's name in the
preceding table bears to the total number of Shares offered hereby.
The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
The Company has agreed that without the written consent of the
Underwriters, it will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities convertible or exchangeable
therefor, for a period of 90 days from the date of this Prospectus Supplement,
subject to limited exceptions. Purchases and sales of the Company's Common Stock
by executive officers and directors between the date hereof and the date of the
Company's press release regarding third quarter earnings (expected on or about
August 15, 1995) are not permitted under the Company's policy regarding trading
in its securities by executive officers and directors.
From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking services to the
Company.
In connection with this offering, certain Underwriters and selling group
members (if any) or their respective affiliates who are qualified registered
market makers on The Nasdaq National Market, may engage in passive market making
transactions in the Common Stock on The Nasdaq National Market in accordance
with Rule 10b-6A under the Securities Exchange Act of 1934, as amended, during
the two business day period before commencement of offers or sales of the Common
Stock. The passive market making transactions must
S-11
<PAGE> 13
comply with applicable volume and price limits and be identified as such. In
general, a passive market maker may display its bid at a price not in excess of
the highest independent bid for the security; if all independent bids are
lowered below the passive market maker's bid, however, such bid must then be
lowered when certain purchase limits are exceeded.
LEGAL OPINIONS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Orrick, Herrington & Sutcliffe, San Francisco,
California. Certain matters will be passed upon for the Underwriters by Wilson
Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.
S-12
<PAGE> 14
PROSPECTUS
(LOGO) APPLIED MATERIALS
DEBT SECURITIES AND COMMON STOCK
------------------------
Applied Materials, Inc. ("Applied Materials" or the "Company") from time to
time may offer its debt securities consisting of senior debentures, notes, bonds
and/or other evidences of indebtedness in one or more series ("Debt Securities")
and shares of Common Stock, $.01 par value, of the Company ("Common Stock") with
an aggregate initial public offering price of up to $600,000,000 or the
equivalent thereof in one or more foreign currencies or composite currencies,
including European Currency Units ("ECU"). The Debt Securities and the Common
Stock (collectively, the "Securities") may be offered, separately or together,
in separate series in amounts, at prices, and on terms to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement").
The Securities may be sold for U.S. Dollars, one or more foreign currencies
or amounts determined by reference to an index and the principal of and any
interest on the Debt Securities may likewise be payable in U.S. Dollars, one or
more foreign currencies or amounts determined by reference to an index.
The Debt Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. See "Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered, such as where applicable, (i) in the case of Debt Securities,
the specific designation, aggregate principal amount, currency, denomination,
maturity, premium, rate (or manner of calculation thereof) and time of payment
of interest, terms for redemption at the option of the Company or the holder or
for sinking fund payments, and the initial public offering price and (ii) in the
case of Common Stock, the number of shares and the initial public offering price
or method of determining the initial public offering price, will be set forth in
an accompanying Prospectus Supplement. See "Description of Debt Securities" and
"Description of Capital Stock."
The Securities may be sold through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone. The
Securities may also be sold directly by the Company or through agents designated
from time to time. If any underwriters or agents are involved in the sale of the
Securities, their names, the principal amount of Securities to be purchased by
them and any applicable fee, commission or discount arrangements with them will
be set forth in the Prospectus Supplement. See "Plan of Distribution."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS JUNE , 1995.
<PAGE> 15
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington D.C. 20549, and
at Regional Offices of the Commission located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington D.C. 20549, at prescribed rates. Such reports, proxy
statements and other information may also be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington D.C. 20006.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") of which this
Prospectus is a part, including exhibits relating thereto, which has been filed
with the Commission in Washington, D.C. Statements made in this Prospectus as to
the contents of any referenced contract, agreement or other document are not
necessarily complete, and each such statement shall be deemed qualified in its
entirety by reference thereto. Copies of the Registration Statement and the
exhibits and schedules thereto may be obtained, upon payment of the fee
prescribed by the Commission, or may be examined without charge, at the office
of the Commission.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
October 30, 1994 (which incorporates by reference portions of the Company's
definitive Proxy Statement dated January 31, 1995 for the Company's Annual
Meeting of Stockholders held on March 14, 1995 and portions of its 1994
Annual Report to Stockholders for the year ended October 30, 1994);
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended January 29, 1995 and April 30, 1995; and
(c) The description of the Company's Common Stock and Common Stock
Purchase Rights contained in its Registration Statement on Form 8-A, filed
on April 5, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement or this Prospectus to the extent that
a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superceded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
Director, Investor Relations, Applied Materials, Inc., 3050 Bowers Avenue, Santa
Clara, California 95054-3299; telephone number (408) 727-5555.
2
<PAGE> 16
THE COMPANY
Applied Materials, Inc. ("Applied Materials" or the "Company") develops,
manufactures, markets and services semiconductor wafer fabrication equipment and
related spare parts for the worldwide semiconductor industry. The Company's
customers include both companies which manufacture semiconductor devices for use
in their own products and companies which manufacture semiconductor devices for
sale to others. The Company operates exclusively in the semiconductor wafer
fabrication equipment industry. The Company is also a fifty percent stockholder
in Applied Komatsu Technology, Inc., which produces thin film transistor
fabrication systems for flat panel displays.
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate management, process control, software and automation. Many of these
technologies are complementary and can be applied across all of the Company's
products. The Company's products provide enabling technology, productivity and
yield enhancements to semiconductor manufacturers. The Company's products are
used to fabricate semiconductor devices on a substrate of semiconductor material
(primarily silicon). A finished device consists of thin film layers which can
form anywhere from one to millions of tiny electronic components that combine to
perform desired electrical functions. The fabrication process must control film
and feature quality to ensure proper device performance while meeting yield and
throughput goals. The Company currently manufactures equipment that addresses
three major steps in wafer fabrication: deposition, etch and ion implantation.
The Company was incorporated in California in 1967 and reincorporated in
Delaware in 1987. Its principal executive offices are located at 3050 Bowers
Avenue, Santa Clara, California 95054-3299 (telephone number (408) 727-5555).
References to the Company or to Applied Materials shall mean Applied Materials,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be used for general corporate purposes, including increases in
working capital and expansion of facilities. The Company believes that success
in its industry requires substantial financial strength and flexibility. In
addition, the Company from time to time considers acquisitions of complementary
businesses, assets or technologies, and although there are no current agreements
or understandings with respect to any such acquisition, the Company desires to
be able to respond to opportunities as they arise. The Company is not
negotiating, discussing or planning any potential acquisition at this time.
Pending such uses, the Company will invest the net proceeds in investment-grade,
interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for each of the
years in the five-year period ended October 30, 1994, and for the six months
ended April 30, 1995 and May 1, 1994. For the purpose of calculating the ratio
of earnings to fixed charges, (i) earnings consists of income before taxes and
cumulative effect of accounting change plus fixed charges and (ii) fixed charges
consists of interest expense incurred, amortization of debt issuance expense and
the portion of rental expense under operating leases deemed by the Company to be
representative of the interest factor.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
------------------- FISCAL YEAR ENDED
APRIL 30, MAY 1, --------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- ------- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges.......................... 13.39x 12.58x 13.37x 7.61x 3.63x 3.02x 5.89x
====== ====== ====== ===== ===== ===== =====
</TABLE>
3
<PAGE> 17
DESCRIPTION OF DEBT SECURITIES
The following statements with respect to the Debt Securities are summaries
of, and subject to, the detailed provisions of an indenture (the "Indenture")
entered into by the Company and Harris Trust Company of California, as trustee
(the "Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all of the provisions of the Indenture, including the
definitions therein of certain terms. Wherever particular Sections or defined
terms of the Indenture are referred to herein or in a Prospectus Supplement,
such Sections or defined terms are incorporated herein or therein by reference.
Section and Article references used herein are references to the Indenture.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture does not limit the aggregate amount of Debt Securities which
may be issued thereunder and Debt Securities may be issued thereunder from time
to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Debt Securities will be senior
unsecured obligations of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of the Debt Securities;
(2) any limit on the aggregate principal amount of the Debt Securities; (3) the
Person to whom any interest on a Debt Security shall be payable, if other than
the person in whose name that Debt Security is registered on the Regular Record
Date; (4) the date or dates on which the principal of the Debt Securities will
be payable; (5) the rate or rates at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates are determined, the
date or dates from which such interest will accrue, the Interest Payment Dates
on which any such interest on the Debt Securities will be payable and the
Regular Record Date for any interest payable on any Interest Payment Date, and
the basis upon which interest will be calculated if other than that of a 360-day
year of twelve 30-day months; (6) the place or places where the principal of and
any premium and interest on the Debt Securities will be payable; (7) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which the Debt Securities may be redeemed, in whole or in part,
at the option of the Company; (8) the obligation of the Company, if any, to
redeem or repurchase the Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of the Holders and the period or periods
within which, the price or prices at which and the terms and conditions upon
which such Debt Securities shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and any provisions for the remarketing of such Debt
Securities; (9) the denominations in which any Debt Securities will be issuable,
if other than denominations of $1,000 and any integral multiple thereof; (10)
the currency, currencies or currency units in which payment of principal of and
any premium and interest on any Debt Securities shall be payable if other than
United States dollars; (11) any index, formula or other method used to determine
the amount of payments of principal of and any premium and interest on the Debt
Securities; (12) if the principal of or any premium or interest on any Debt
Securities is to be payable, at the election of the Company or the Holders, in
one or more currencies or currency units other than that or those in which such
Debt Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on such
Debt Securities shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (13) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which will be payable upon declaration of the acceleration of the
Maturity thereof; (14) the applicability of any provisions described under
"Defeasance and Covenant Defeasance"; (15) whether any of the Debt Securities
are to be issuable in permanent global form and, if so, the Depositary or
Depositaries for such Global Security and the terms and conditions, if any, upon
which interests in such Debt Securities in global form may be exchanged, in
whole or in part, for the individual Debt Securities represented thereby; (16)
the Security Registrar, if other than the
4
<PAGE> 18
Trustee, and the entity who will be the Paying Agent; (17) any Events of
Default, with respect to the Debt Securities of such series, if not otherwise
set forth under "Events of Default"; (18) if other than the date of original
issuance by the Company of such series of Debt Securities, such other date as is
applicable to the Debt Securities of such series for purposes of the covenant
described under "Covenants of the Company -- Restrictions on Funded Debt of
Restricted Subsidiaries" below; and (19) any other terms of the Debt Securities
not inconsistent with the provisions of the Indenture. (Section 301)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount from their principal amount. (Section 301) United
States Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the Prospectus Supplement relating thereto.
If any of the Debt Securities are sold for any foreign currency or currency
unit or if principal of, premium, if any, or interest, if any, on any of the
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Debt Securities and such foreign currency or currency unit
will be specified in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the exchange of and the transfer of Debt Securities will be
registrable, at the office or agency of the Company maintained for such purpose
and at any other office or agency maintained for such purpose. (Sections 305 and
1002) Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued in denominations of $1,000 or integral multiples
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium, or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof. (Section
1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part. (Section 305)
GLOBAL SECURITIES
If any Debt Securities of a series are issuable as Global Securities, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such Global Security may exchange
such interests for Debt Securities of such series and of like tenor and
principal amount of any authorized form and denomination. Principal of and any
premium and interest on a Global Security will be payable in the manner
described in the Prospectus Supplement relating thereto.
COVENANTS OF THE COMPANY
Except as set forth below or as otherwise provided in the applicable
Prospectus Supplement with respect to any series of Debt Securities, the Company
is not restricted by the Indenture from incurring, assuming or becoming liable
for any type of debt or other obligations, from paying dividends or making
distributions on its capital stock or purchasing or redeeming its capital stock.
The Indenture does not require the maintenance of any financial ratios or
specified levels of net worth or liquidity. In addition, the Indenture does not
contain any
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provision that would require the Company to repurchase or redeem or otherwise
modify the terms of any of its Debt Securities upon a change in control or other
events involving the Company which may adversely affect the creditworthiness of
the Debt Securities.
Unless otherwise indicated in the applicable Prospectus Supplement, certain
covenants contained in the Indenture which are summarized below will be
applicable (unless waived or amended) to the series of Debt Securities to which
such Prospectus Supplement relates so long as any of the Debt Securities of such
series are outstanding.
Limitations on Liens. The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted Subsidiary to
issue, incur, create, assume or guarantee, any debt for borrowed money secured
by a mortgage, security interest, pledge, lien, charge or other encumbrance
("mortgages") upon any Principal Property or Domestic Receivables or Inventory
of the Company or any Restricted Subsidiary or upon any shares of stock or
indebtedness of any Restricted Subsidiary (whether such Principal Property, or
Domestic Receivables or Inventory, shares or indebtedness are now existing or
owed or hereafter created or acquired) without in any such case effectively
providing concurrently with the issuance, incurrence, creation, assumption or
guaranty of any such secured debt that the Debt Securities (together with, if
the Company shall so determine, any other indebtedness of or guarantee by the
Company or such Restricted Subsidiary ranking equally with the Debt Securities)
shall be secured equally and ratably with (or, at the option of the Company,
prior to) such secured debt. The foregoing restriction, however, will not apply
to: (a) mortgages on property, shares of stock or indebtedness or other assets
of any corporation existing at the time such corporation becomes a Restricted
Subsidiary, provided that such mortgages or liens are not incurred in
anticipation of such corporation becoming a Restricted Subsidiary; (b)(i)
mortgages on property, shares of stock, indebtedness or other assets existing at
the time of acquisition thereof by the Company or a Restricted Subsidiary (which
may include property previously leased by the Company and leasehold interests
thereon, provided that the lease terminates prior to the acquisition) or
mortgages thereon to secure the payment of all or any part of the purchase price
thereof, or (ii) mortgages on property, shares of stock, indebtedness or other
assets to secure any indebtedness for borrowed money incurred prior to, at the
time of, or within 270 days after, the latest of the acquisition thereof, or, in
the case of property, the completion of construction, the completion of
improvements or the commencement of substantial commercial operation of such
property for the purpose of financing all or any part of the purchase price
thereof, such construction or the making of such improvements; (c) mortgages to
secure indebtedness owing to the Company or to a Restricted Subsidiary; (d)
mortgages existing at the date of the initial issuance of the Securities of such
series; (e) mortgages on property or other assets of a corporation existing at
the time such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a sale, lease or other disposition of
the properties of a corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary, provided that such mortgage was not
incurred in anticipation of such merger or consolidation or sale, lease or other
disposition; (f) mortgages in favor of the United States of America or any
State, territory or possession thereof (or the District of Columbia), or any
department, agency, instrumentality or political subdivision of the United
States of America or any State, territory or possession thereof (or the District
of Columbia), to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages; or (g) extensions, renewals
or replacements of any mortgage referred to in the foregoing clauses (a) through
(f); provided, however, that any mortgages permitted by any of the foregoing
clauses (a) through (f) shall not extend to or cover any property of the Company
or such Restricted Subsidiary, as the case may be, other than the property
specified in such clauses and improvements thereto. (Section 1008)
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary may issue, incur, create, assume or
guarantee debt secured by a mortgage which would otherwise be subject to such
restrictions, without equally and ratably securing the Debt Securities, provided
that after giving effect thereto, the aggregate amount of all debt so secured by
mortgages (not including mortgages permitted under clauses (a) through (g)
above) does not exceed 5% of the Consolidated Net Tangible Assets of the
Company. (Section 1008)
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Limitations on Sale and Lease-Back Transactions. The Company covenants that
it will not, nor will it permit any Restricted Subsidiary to, enter into any
Sale and Lease-Back Transaction with respect to any Principal Property, other
than any such transaction involving a lease for a term of not more than three
years or any such transaction between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries, unless: (a) the Company or such Restricted
Subsidiary would be entitled to incur indebtedness secured by a mortgage on the
Principal Property involved in such transaction at least equal in amount to the
Attributable Debt with respect to such sale and lease-back transaction, without
equally and ratably securing the Debt Securities, pursuant to the limitation in
the Indenture on liens; or (b) the Company shall apply an amount equal to the
greater of the net proceeds of such sale or the Attributable Debt with respect
to such sale and lease-back transaction within 180 days of such sale to either
(or a combination of) (i) the retirement (other than any mandatory retirement,
mandatory prepayment or sinking fund payment or by payment at maturity) of debt
for borrowed money of the Company or a Restricted Subsidiary that matures more
than twelve months after the creation of such indebtedness or (ii) the purchase,
construction or development of other comparable property. (Section 1009)
Restrictions on Funded Debt of Restricted Subsidiaries. The Company
covenants that it will not permit any Restricted Subsidiary to create, incur,
issue, assume or guarantee any Funded Debt. The foregoing restriction, however,
will not apply if: (a) the Company or such Restricted Subsidiary could create
Debt secured by mortgages in accordance with the "Limitations on Liens" covenant
described above or enter into a sale and lease-back transaction in accordance
with the "Limitations on Sale and Lease-Back Transactions" covenant described
above in an amount equal to such Funded Debt, without equally and ratably
securing the Debt Securities; or (b) such Funded Debt existed on the date of the
original issuance by the Company of the Debt Securities issued pursuant to the
Indenture, or such other date as may be specified in the Prospectus Supplement;
or (c) such Funded Debt is owed to the Company or any Subsidiary; or (d) such
Funded Debt existed at the time the corporation that issued such Funded Debt
became a Restricted Subsidiary, or was merged with or into or consolidated with
such Restricted Subsidiary; or at the time of a sale, lease or other disposition
of the properties of such corporation as an entirety to such Restricted
Subsidiary, or arising thereafter (i) otherwise than in connection with the
borrowing of money arranged thereafter and (ii) pursuant to contractual
commitments entered into prior to and not in contemplation of such corporation
becoming a Restricted Subsidiary and not in contemplation of such merger or
consolidation or any such sale, lease or other disposition; or (e) such Funded
Debt is issued, assumed or guaranteed in connection with, or with a view to,
compliance by such Restricted Subsidiary with the requirements of any program
adopted by any federal, state or local governmental authority and applicable to
such Restricted Subsidiary and providing financial or tax benefits to such
Restricted Subsidiary which are not available directly to the Company; or (f)
such Funded Debt is issued, assumed or guaranteed to pay all or any part of the
purchase price or the construction cost of land, land improvements, buildings,
fixtures and equipment acquired by a Restricted Subsidiary, provided such Funded
Debt is incurred within 270 days after acquisition, completion of construction
or commencement of full operation of such property, whichever is later; or (g)
such Funded Debt is incurred for the purpose of extending, renewing,
substituting, replacing or refunding Funded Debt permitted by the foregoing.
(Section 1010)
Notwithstanding the foregoing, any Restricted Subsidiary may create, incur,
issue, assume or guarantee Funded Debt which would otherwise be subject to the
foregoing restrictions in an aggregate principal amount which, together with the
aggregate outstanding principal amount of all other Funded Debt of the Company's
Restricted Subsidiaries which would otherwise be subject to the foregoing
restrictions (not including Funded Debt permitted to be incurred pursuant to
clauses (a) through (g) above), does not at the time such Funded Debt is
incurred exceed an amount equal to 5% of the Consolidated Net Tangible Assets.
(Section 1010)
Certain Definitions Applicable to Covenants. The term "Attributable Debt"
when used in connection with a Sale and Lease-Back Transaction involving a
Principal Property shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by the Board of
Directors of the Company); or (b) the present value of the total net amount of
rent required to be paid under such lease during the remaining term thereof
(including any renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the terms of such
lease or, if not
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practicable to determine such rate, the weighted average interest rate per annum
borne by the Debt Securities of each series outstanding pursuant to the
Indenture compounded semi-annually, in either case as determined in good faith
by the principal accounting or financial officer of the Company. For purposes of
the foregoing definition, rent shall not include amounts required to be paid by
the lessee, whether or not designated as rent or additional rent, on account of
or contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the net
amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" shall mean, as of any
particular time, the aggregate amount of assets (less applicable reserves and
other properly deductible items) after deducting therefrom: (a) all current
liabilities, except for (1) notes and loans payable, (2) current maturities of
long-term debt and (3) current maturities of obligations under capital leases;
and (b) certain intangible assets, to the extent included in said aggregate
amount of assets, all as set forth on the most recent consolidated balance sheet
of the Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
The term "Domestic Receivables or Inventory" shall mean accounts receivable
arising from the sale of inventory or inventory owned by the Company or any
Subsidiary whose principal place of business and place of incorporation is
located in the United States of America. For purposes hereof, inventory and
receivables shall be deemed to be "owned" if they are deemed to be assets of the
Company or such Subsidiary for purposes of generally accepted accounting
principles.
The term "Funded Debt" shall mean indebtedness created, assumed or
guaranteed by a Person for money borrowed which matures by its terms, or is
renewable by the Borrower to a date, more than one year after the date of
original creation, assumption or guarantee.
The term "Principal Property" shall mean the land, land improvements,
buildings and fixtures (to the extent they constitute real property interests)
(including any leasehold interest therein) constituting the principal corporate
office, any manufacturing plant or any manufacturing facility (whether now owned
or hereafter acquired) and the equipment located thereon which: (a) is owned by
the Company or any Subsidiary; (b) is located within any of the present 50
States of the United States of America (or the District of Columbia); (c) has
not been determined in good faith by the Board of Directors of the Company not
to be materially important to the total business conducted by the Company and
its Subsidiaries taken as a whole; and (d) has a book value on the date as of
which the determination is being made in excess of 0.75% of Consolidated Net
Tangible Assets of the Company as most recently determined on or prior to such
date (including for purposes of such calculation the land, land improvements,
buildings and such fixtures compromising such office, plant or facilities, as
the case may be).
The term "Restricted Subsidiary" shall mean any Subsidiary which owns any
Principal Property or Domestic Receivables or Inventory; provided, however, that
the term "Restricted Subsidiary" shall not include any Subsidiary which is
principally engaged in financing the Company's operations outside the United
States of America; and provided, further, that the term "Restricted Subsidiary"
shall not include any Subsidiary less than 80% of the voting stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries if the common
stock of such Subsidiary is traded on any national securities exchange or quoted
on the Nasdaq National Market or in the over-the-counter market.
The term "Sale and Lease-Back Transaction" shall mean any arrangement with
any Person providing for the leasing by the Company or any Restricted Subsidiary
of any Principal Property which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person.
The term "Subsidiary" shall mean any corporation of which at least 66 2/3%
of the outstanding stock having the voting power to elect a majority of the
board of directors of such corporation is at the time owned,
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directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to the provisions of the Indenture, the
Company may elect (i) to defease and be discharged from any and all obligations
in respect of such Debt Securities except for the rights of holders to receive
payments in respect of the principal of and any premium and interest on such
Debt Securities and for certain obligations to register the transfer or exchange
of such Debt Securities, to replace temporary, destroyed, stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold monies for
payment in trust ("defeasance") or (ii) (A) to omit to comply with certain
restrictive covenants in Sections 1005 through 1010 (including the covenants
referred to above under "Covenants of the Company") and (B) to deem the
occurrence of any event referred to in clauses (d) (with respect to Sections
1005 through 1010 inclusive) and (g) under "Events of Default" below not to be
or result in an Event of Default if, in each case with respect to the
Outstanding Debt Securities of such series as provided in Section 1303 on or
after the date the conditions set forth in Section 1304 are satisfied ("covenant
defeasance"), in either case upon the deposit with the Trustee (or other
qualifying trustee), in trust, of money and/or U.S. Government Obligations,
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of and any premium and interest on the Debt Securities of such
series on the respective Stated Maturities and any mandatory sinking fund
payments or analogous payments on the days payable, in accordance with the terms
of the Indenture and the Debt Securities of such series. Such a trust may only
be established if, among other things, the Company has delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the Outstanding Debt
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit, defeasance or covenant
defeasance 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 or covenant defeasance had not occurred. Such opinion, in
the case of defeasance under clause (i) above, must refer to and be based upon a
ruling of the Internal Revenue Service or a change in applicable Federal income
tax laws occurring after the date of the Indenture. The Prospectus Supplement
relating to a series may further describe the provisions, if any, permitting
such defeasance or covenant defeasance with respect to the Debt Securities of a
particular series. (Article Thirteen)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (a) failure to pay any interest on any
Debt Security of that series when due, continued for 30 days; (b) failure to pay
principal of or any premium on any Debt Security of that series when due; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization involving the
Company; (f)(i) failure of the Company to make any payment at maturity,
including any applicable grace period, in respect of indebtedness, which term as
used in the Indenture means obligations (other than non-recourse obligations or
the Debt Securities of such series) of the Company for borrowed money or
evidenced by bonds, debentures, notes or similar instruments ("Indebtedness") in
an amount in excess of $10,000,000 and continuance of such failure or (ii) a
default with respect to any Indebtedness, which default results in the
acceleration of Indebtedness in an amount in excess of $10,000,000 without such
Indebtedness having been discharged or such acceleration having been cured,
waived, rescinded or annulled, in the case of (i) or (ii) above, for a period of
30 days after written notice thereof to the Company by the Trustee or to the
Company and the Trustee by the holders of not less than 15%
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in principal amount of Debt Securities of such series; provided, however, that
if any such failure, default or acceleration referred to in (i) or (ii) above
shall cease or be cured, waived, rescinded or annulled, then the Event of
Default by reason thereof shall be deemed likewise to have been thereupon cured;
and (g) any other Event of Default provided with respect to Debt Securities of
that series. (Section 501)
Subject to the provisions of the Indenture relating to the duties of the
Trustee during default to act with the required standard of care, the Trustee is
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable indemnity. (Sections 601 and 603) Subject
to such provisions for the indemnification of the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
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 Debt Securities of that series.
(Section 512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, a brief certificate from the
principal executive, financial or accounting officer of the Company as to his or
her knowledge of the Company's compliance (without regard to any period of grace
or requirement of notice) with all conditions and covenants of the Indenture.
(Section 1004)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in principal amount of the Outstanding Debt Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Debt Securities of that series to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502)
No Holder of any Debt Security of any series has any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless the Holders of at least 25% in principal
amount of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) However, such
limitations generally do not apply to a suit instituted by a Holder of a Debt
Security for the enforcement of payment of the principal or interest on such
Debt Security on or after the respective due dates expressed in such Debt
Security. (Section 508)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (b) reduce
the principal amount of, rate of interest on or any premium payable upon the
redemption of any Debt Security, (c) reduce the amount of principal of an
Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (d) change the Place of Payment where, or the coin or currency in
which, any Debt Security or any premium or interest thereon is payable, (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security after the Stated Maturity, Redemption Date or
Repayment Date, (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults,
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<PAGE> 24
or (g) modify any of the provisions set forth in this paragraph except to
increase any such percentage or to provide that certain other provisions of the
Indenture may not be modified or waived without the consent of the Holder of
each Outstanding Debt Security affected thereby. (Section 902)
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of the Holders of all the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1011) The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of each series may, on behalf of all Holders of
Debt Securities of that series and any coupons appertaining thereto, waive any
past default under the Indenture with respect to Debt Securities of that series,
except a default (a) in the payment of principal of or any premium or interest
on any Debt Security of such series or (b) 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 Debt Security of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities (i)
the principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof, (ii) the principal amount of a Debt Security denominated in
other than U.S. dollars shall be the U.S. dollar equivalent, determined on the
date of original issuance of such Debt Security, of the principal amount of such
Debt Security (or, in the case of an Original Issue Discount Security, the U.S.
dollar equivalent on the date of original issuance of such Debt Security of the
amount determined as provided in (i) above of such Debt Security) and (iii) Debt
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, provided that any successor Person expressly
assumes the Company's obligations on the Debt Securities and under the Indenture
and that, after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing, and that certain other conditions are
met. (Section 801)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Debt
Securities will be given by mail to the addresses of such Holders as they appear
in the Debt Security Register. (Section 106)
TITLE
Prior to due presentment of a Debt Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of principal of and any
premium and any interest (other than Defaulted Interest or as otherwise provided
in the applicable Prospectus Supplement) on such Debt Security and for all other
purposes whatsoever, whether or not such Debt Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. (Section 308)
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Debt Security
or
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evidence of the destruction, loss or theft thereof satisfactory to the Company
and the Trustee. In the case of a destroyed, lost or stolen Debt Security, an
indemnity satisfactory to the Trustee and the Company may be required at the
expense of the Holder of such Debt Security before a replacement Debt Security
will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee is
permitted to engage in certain other transactions; however, if it acquires any
conflicting interest and there is a default under the Debt Securities of any
series for which the Trustee serves as trustee, the Trustee must eliminate such
conflict or resign. (Section 608)
The Trustee currently provides certain banking and financial services to
the Company in the ordinary course of business and may provide other such
services in the future.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 1,000,000 shares of
Preferred Stock, none of which has been issued, and 200,000,000 shares of Common
Stock, approximately 84,744,000 of which were issued and outstanding as of April
30, 1995.
PREFERRED STOCK
Under the Company's Certificate of Incorporation, the Board of Directors is
authorized to issue shares of Preferred Stock from time to time in one or more
series and to determine the designation and number of shares of each series and
the relative rights, preferences and limitations with respect to dividends,
redemptions (including sinking fund provisions), liquidation, dissolution or
winding up, voting rights and conversion, all in accordance with the laws of the
State of Delaware. When shares of Preferred Stock are issued, certain rights of
the holders thereof may materially affect the rights of the holders of the
Common Stock, including voting rights and preferences in respect of dividends
and liquidation.
COMMON STOCK
All issued and outstanding shares of Common Stock of the Company, including
the shares offered hereby, are fully paid and nonassessable. Holders of Common
Stock have no preemptive, subscription or conversion rights and are not liable
for further calls or assessments. There are no redemption or sinking fund
provisions in effect with respect to the Common Stock. Subject to the rights of
any then outstanding Preferred Stock, holders of Common Stock are entitled to
receive such dividends as may be declared by the Board of Directors out of funds
legally available therefor and to share ratably in the assets available for
distribution upon liquidation. Except as described below, each share of Common
Stock is entitled to one vote at all meetings of stockholders. The holders of
Common Stock are not entitled to cumulative voting rights in the election of
directions.
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business. The Common Stock of the Company
is traded on The Nasdaq National Market under the symbol AMAT. The transfer
agent and registrar for the Common Stock is Harris Trust Company of California.
12
<PAGE> 26
The Certificate of Incorporation and the By-Laws of the Company contain
provisions that could have certain anti-takeover effects. The Board of Directors
has no current plans to formulate or effect additional measures that could have
anti-takeover effects.
Fair Price Provisions. The Certificate of Incorporation contains a fair
price provision pursuant to which, unless certain minimum price criteria and
procedural requirements are satisfied, Business Combinations (as defined in the
Certificate of Incorporation) with any person who is the beneficial owner of 15%
or more of the Voting Stock (as defined) or with certain other persons must be
approved by either the holders of two-thirds of the Company's outstanding voting
stock or a majority of the Continuing Directors (as defined) of the Company.
These provisions may have the effect of discouraging or deterring a third party
from making an offer to the Company's stockholders to acquire a substantial
amount or all of the Company's Common Stock.
No Stockholder Action by Written Consent; Special Meetings. The Certificate
of Incorporation prohibits stockholder action by written consent in lieu of a
meeting. The provision of the Certificate of Incorporation prohibiting
stockholder action by written consent may have the effect of delaying
consideration of a stockholder proposal until the next annual meeting unless a
special meeting is called by the Board of Directors, the Chairman of the Board
of Directors, or the President of the Company. This provision would also prevent
the holders of a majority of the outstanding shares of Common Stock from using
the written consent procedure to take stockholder action and from taking action
by consent without giving all the stockholders of the Company entitled to vote
on a proposed action the opportunity to participate in determining such proposed
action.
Advance Notice Requirements for Stockholders' Proposals and Director
Nominations. The By-Laws establish an advance notice procedure with regard to
the nomination, other than by or at the direction of the Board of Directors or a
committee thereof, of candidates for election as directors (the "Nomination
Procedure") and with regard to certain matters to be brought before a meeting of
stockholders of the Company (the "Business Procedure").
The Nomination Procedure provides that the notice of proposed stockholder
nominations for the election of directors must be timely given in writing to the
Secretary of the Company prior to the meeting at which directors are to be
elected. The Business Procedure provides that only such business may be
conducted at a stockholders' meeting as has been brought before the meeting by,
or at the direction of, the Board of Directors or by a stockholder who has given
timely prior written notice to the Secretary of the Company of such
stockholder's intention to bring such business before the meeting. In the case
of both the Nomination Procedure and the Business Procedure, to be timely,
notice must be received not less than 60 days prior to the date of the
stockholders' meeting or 10 days after the date on which notice of the meeting
is first given.
Although the By-Laws do not give the Board of Directors any power to
approve or disapprove stockholder nominations for the election of directors or
any other business desired by stockholders to be conducted at a stockholders'
meeting, the By-Laws may have the effect of precluding a nomination for the
election of directors or precluding the conducting of business at a particular
meeting if the proper procedures are not followed, and may discourage or deter a
third party from conducting a solicitation of proxies to elect its own slate of
directors or otherwise attempting to obtain control of the Company, even if the
conduct of such solicitation or such attempt might otherwise be desired by the
Company's stockholders.
Amendment of Certain Provisions of the Certificate of Incorporation. The
Certificate of Incorporation requires the affirmative vote of the holders of at
least two-thirds of the total voting power of all the outstanding shares of
stock entitled to vote generally in the election of directors for any amendment
of the fair price provision of the Certificate of Incorporation described above.
This provision will make it more difficult for stockholders to make changes in
the Certificate of Incorporation. In addition, the requirement for approval by
at least a two-thirds stockholder vote will enable the holders of a minority of
the voting stock of the Company to prevent the holders of a majority or more of
the stock from amending such provisions of the Certificate of Incorporation.
Preferred Stock. The Certificate of Incorporation authorizes the Board of
Directors to fix, with respect to any series of Preferred Stock, the powers,
preferences and rights of the shares of such series. Although the
13
<PAGE> 27
Company has no intention at the present time of doing so, it could issue
Preferred Stock that could, depending on its terms, either impede or facilitate
the completion of a merger, tender offer or other takeover attempt. Although the
Board of Directors is required to make any determination to issue such stock
based on its judgment as to the best interest of the stockholders of the
Company, the Board of Directors could act in a manner that would discourage an
acquisition attempt or other transaction that some, or a majority, of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then market price
of such stock.
RIGHTS PLAN
In June 1989, the Board of Directors of Applied Materials declared a
dividend distribution of one right (a "Right" or, collectively, the "Rights")
for each outstanding share of Common Stock of the Company to stockholders of
record at the close of business on June 26, 1989 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one-fourth of a share (a "Unit") of Common Stock, at a price of $11.25 per Unit
(the "Exercise Price"), subject to adjustment (giving effect to two subsequent
two-for-one stock splits). The description and terms of the Rights are set forth
in a Rights Agreement dated as of June 14, 1989 (the "Rights Agreement").
Initially, the Rights are evidenced by the Common Stock certificates
representing shares outstanding and no separate Rights certificates will be
distributed. The Rights will be exercisable, and transferable apart from the
shares of Common Stock, on the earlier to occur of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days following
the commencement of (or a public announcement of an intention to commence) a
tender offer or exchange offer if, upon consummation thereof, the person who
commenced the offer would be an Acquiring Person (the earlier of such dates
being called the "Distribution Date"). The foregoing time periods are subject to
extension as set forth in the Rights Agreement. After the occurrence of the
event set forth in clause (ii) above, the Rights would become exercisable for a
Unit of Common Stock at the Exercise Price. After the occurrence of the event
set forth in clause (i) above, the Rights would become exercisable as set forth
below.
In the event that a person becomes the beneficial owner of 20% or more of
the then outstanding shares of Common Stock (other than as a result of a tender
or exchange offer for all shares of the Common Stock at a price and on terms
determined by a majority of the directors who are not representatives, nominees,
affiliates or associates of an Acquiring Person, after receiving advice from one
or more nationally recognized investment banking firms selected by such
directors, to be fair and adequate to the stockholders, and otherwise in the
best interests of the Company and its stockholders (a "Permitted Offer")), the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter have the right to receive, for a 90-day period
(the "Exercise Period"), upon exercise, Common Stock (or, under certain
circumstances, cash, a reduction in the Exercise Price, other securities of the
Company or any combination thereof) having a market value equal to two times the
exercise price paid (i.e., at a 50% discount). Following the occurrence of this
event, any Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person shall
immediately become null and void. However, Rights generally are not exercisable
following the occurrence of such an event until such time as the Rights are no
longer redeemable by the Company as set forth below. Further, Rights generally
are exercisable only after the effectiveness of a registration statement for the
Common Stock issuable upon exercise of the Rights under the Securities Act of
1933.
In the event that, at any time following the Distribution Date, (i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation (other than following a Permitted
Offer), (ii) the Company engages in a merger or other business combination
transaction with another person in which the Company is the surviving
corporation, but in which its Common Stock is changed or exchanged (other than
following a Permitted Offer), or (iii) 50% or more of the Company's assets or
earning power (on a consolidated basis) is sold or transferred, the Rights
Agreement provides that proper provision shall be made so that each holder of a
Right (except Rights which previously have been voided as
14
<PAGE> 28
set forth above) shall thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, common stock of the
acquiring company having a market value equal to two times the exercise price
paid (i.e., at a 50% discount). The events described in clauses (i), (ii) and
(iii) of this paragraph are defined as "Triggering Events."
The Exercise Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for preferred stock that is substantially the same as
Common Stock or convertible securities at less than the current market price of
the Common Stock, or (iii) upon the distribution to holders of the Common Stock
of evidences of indebtedness, cash (excluding regular quarterly cash dividends),
assets (other than dividends payable in Common Stock) or of subscription rights
or warrants (other than those referred to above).
At any time after the date of the Rights Agreement until 10 business days
(or such later date as the Board of Directors of the Company may determine)
following the Stock Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.0025 per Right, as adjusted for stock
splits, stock dividends or similar transactions (the "Redemption Price"),
payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors. Thereafter, the Company's right of redemption may be
reinstated if the Exercise Period has expired, no Triggering Event has occurred
and an Acquiring Person reduces his beneficial ownership to 5% or less of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company and there are no other Acquiring Persons. Immediately
upon the action of the Board of Directors of the Company ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to the stockholders or the Company, the stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for common stock of the acquiring company as set forth above.
The foregoing description of the Company's Common Stock and the Rights do
not purport to be a complete description of the terms of the Company's Common
Stock and the Rights and is qualified in its entirety by reference to the terms
of such Common Stock and Rights, which are incorporated herein by reference and
are set forth in full in the Company's Certificate of Incorporation and the
Rights Agreement, respectively.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. This statute generally prohibits, under certain
circumstances, a Delaware corporation whose stock is publicly traded, from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) the corporation has elected in its
certificate of incorporation or bylaws not to be governed by this Delaware law
(the Company has not made such an election), (ii) prior to the time the
stockholder became an interested stockholder, the board of directors approved
either the business combination or the transaction which resulted in the person
becoming an interested stockholder, (iii) the stockholder owned at least 85% of
the outstanding voting stock of the corporation (excluding shares held by
directors who were also officers or held in certain employee stock plans) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder or (iv) the business combination was approved by the
board of directors and by two-thirds of the outstanding voting stock of the
corporation (excluding shares held by the interested stockholder). An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or any time within the prior three years did own) 15% or more
of the corporation's outstanding voting stock. The term "business combination"
is defined generally to include mergers, consolidations, stock sales, asset
based transactions, and other transactions resulting in a financial benefit to
the interested stockholder.
15
<PAGE> 29
PLAN OF DISTRIBUTION
The Company may sell the Securities separately or together, (i) to one or
more underwriters or dealers for public offering and sale by them and (ii) to
investors directly or through agents. The distribution of the Securities may be
effected from time to time in one or more transactions at a fixed price or
prices (which may be changed from time to time), at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Each Prospectus Supplement will describe the method of
distribution of the Securities offered thereby.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of the
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents which
participate in the distribution of the Securities may be deemed to be
underwriters under the Securities Act of 1933 and any discounts or commissions
received by them and any profit on the resale of the Securities received by them
may be deemed to be underwriting discounts and commissions thereunder. Any such
underwriter, dealer or agent will be identified and any such compensation
received from the Company will be described in the Prospectus Supplement. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
The Company may grant underwriters who participate in the distribution of
Securities an option to purchase additional Securities to cover over-allotments,
if any.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the Company
for public offering and sale may make a market in such securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any such securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with or perform services for the Company in the
ordinary course of business.
LEGAL OPINIONS
The validity of the Securities is being passed upon for the Company by
Orrick, Herrington & Sutcliffe, San Francisco, California.
EXPERTS
The audited consolidated financial statements incorporated in this
Prospectus, and the financial statement schedules incorporated in the
Registration Statement, by reference to the Annual Report on Form 10-K of
Applied Materials, Inc. for the year ended October 30, 1994 have been so
incorporated in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
16
<PAGE> 30
(LOGO)
<PAGE> 31
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth expenses in connection with the issuance and
distribution of the securities being registered, other than the underwriting
discount and commissions.
<TABLE>
<S> <C>
Registration fee.................................................. $194,776
Nasdaq National Market fee........................................ 17,500
Trustee's fees and expenses....................................... 15,000*
Accountants' fees and expenses.................................... 150,000*
Printing and engraving expenses................................... 50,000*
Blue sky and legal investment fees and expenses................... 15,000*
Rating agencies' fees............................................. 125,000*
Legal fees and expenses........................................... 150,000*
Miscellaneous..................................................... 32,724*
--------
Total................................................... $750,000
========
</TABLE>
- ------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "Delaware Law")
authorizes a court to award, or a corporation's board of directors to grant,
indemnity 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 of 1933,
as amended (the "Securities Act"). The Registrant's Certificate of Incorporation
and Bylaws provide for indemnification of the Registrant's directors, officers,
employees and other agents to the maximum extent permitted by the Delaware Law.
In addition, the Registrant has entered into indemnification agreements with its
officers and directors.
Reference is made to Section 6 of the Underwriting Agreement included
herein as an exhibit to the Registration Statement for provisions regarding
indemnification of the Company, officers, directors and controlling persons
against certain liabilities.
II-1
<PAGE> 32
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ---------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 to
the Company's Registration Statement on Form S-3 (Reg. No. 33-52471)).
4.1 Indenture dated as of August 24, 1994 between the Registrant and Harris
Trust Company of California, as Trustee.
4.2 Form of Debt Security (included in Exhibit 4.1)
4.3 Form of Fixed Rate Medium-Term Note.
5.1 Opinion of Orrick, Herrington & Sutcliffe as to the validity of the Debt
Securities and Common Stock.
12.1 Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Price Waterhouse LLP.
23.2 The consent of Orrick, Herrington & Sutcliffe is contained in its opinion
filed as Exhibit 5.1 to this Registration Statement
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Harris Trust Company of California
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby 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; (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; 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; provided, however, that the
undertakings set forth in clauses (i) and (ii) above shall not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
(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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 15 above, 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
II-2
<PAGE> 33
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 against the Registrant 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 hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus sall
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.
II-3
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Applied Materials, Inc., a corporation organized and existing under the laws of
Delaware, 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 and County of Santa Clara, State of California, on the
15th day of June, 1995.
APPLIED MATERIALS, INC.
By: /s/ JAMES C. MORGAN
------------------------------------
James C. Morgan
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------------------------------------------- --------------------------------- --------------
<C> <S> <C>
(1) PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
/s/ JAMES C. MORGAN Chairman of the Board, Chief June 15, 1995
- --------------------------------------------- Executive Officer and Director
(James C. Morgan)
(2) PRINCIPAL FINANCIAL OFFICER:
/s/ GERALD F. TAYLOR Senior Vice President and Chief June 15, 1995
- --------------------------------------------- Financial Officer
(Gerald F. Taylor)
(3) PRINCIPAL ACCOUNTING OFFICER:
/s/ MICHAEL K. O'FARRELL Corporate Controller June 15, 1995
- ---------------------------------------------
(Michael K. O'Farrell)
(4) DIRECTORS:
Director June , 1995
- ---------------------------------------------
(Michael H. Armacost)
* Director June 15, 1995
- ---------------------------------------------
(James W. Bagley)
* Director June 15, 1995
- ---------------------------------------------
(Herbert M. Dwight, Jr.)
</TABLE>
II-4
<PAGE> 35
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------------------------------------------- --------------------------------- --------------
<C> <S> <C>
* Director June 15, 1995
- ---------------------------------------------
(George B. Farnsworth)
* Director June 15, 1995
- ---------------------------------------------
(Philip V. Gerdine)
* Director June 15, 1995
- ---------------------------------------------
(Tsuyoshi Kawanishi)
* Director June 15, 1995
- ---------------------------------------------
(Paul R. Low)
* Director June 15, 1995
- ---------------------------------------------
(Dan Maydan)
* Director June 15, 1995
- ---------------------------------------------
(Alfred J. Stein)
*By: /s/ JAMES C. MORGAN
- ---------------------------------------------
(James C. Morgan)
Attorney-in-Fact
</TABLE>
A majority of the members of the Board of Directors
II-5
<PAGE> 36
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ---------------------------------------------------------------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement (incorporated by reference to
Exhibit 1.1 to the Company's Registration Statement on Form S-3
(Reg. No. 33-52471))............................................
4.1 Indenture dated as of August 24, 1994 between the Registrant and
Harris Trust Company of California, as Trustee..................
4.2 Form of Debt Security (included in Exhibit 4.1).................
4.3 Form of Fixed Rate Medium-Term Note.............................
5.1 Opinion of Orrick, Herrington & Sutcliffe as to the validity of
the Debt Securities and Common Stock............................
12.1 Computation of Ratio of Earnings to Fixed Charges...............
23.1 Consent of Price Waterhouse LLP.................................
23.2 The consent of Orrick, Herrington & Sutcliffe is contained in
its opinion filed as Exhibit 5.1 to this Registration
Statement.......................................................
24.1 Powers of Attorney..............................................
25.1 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Harris Trust Company of
California......................................................
</TABLE>
<PAGE> 1
EXHIBIT 4.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPLIED MATERIALS, INC.
TO
HARRIS TRUST COMPANY OF CALIFORNIA
TRUSTEE
---------
INDENTURE
DATED AS OF AUGUST 24, 1994
---------
DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
APPLIED MATERIALS, INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE,
OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
- ---------- ---------------
<C> <S> <C> <C>
sec. ........................................... 609
310(a) (1)
(a) (2) ........................................... 609
(a) (3) ........................................... Not Applicable
(a) (4) ........................................... Not Applicable
(b) ........................................... 608
610
sec. ........................................... 613
311(a)
(b) ........................................... 613
sec. ........................................... 701
312(a)
702(a)
(b) ........................................... 702(b)
(c) ........................................... 702(c)
sec. ........................................... 703(a)
313(a)
(b) ........................................... 703(a)
(c) ........................................... 703(a)
(d) ........................................... 703(b)
sec. ........................................... 704
314(a)
(a) (4) ........................................... 101
1004
(b) ........................................... Not Applicable
(c) (1) ........................................... 102
(c) (2) ........................................... 102
(c) (3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 102
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
- ---------- ---------------
<C> <S> <C> <C>
sec. ........................................... 601
315(a)
(b) ........................................... 602
(c) ........................................... 601
(d) ........................................... 601
(e) ........................................... 514
sec. ........................................... 101
316(a)
(a) (1)(A) ........................................... 502
512
(a) (1)(B) ........................................... 513
(a) (2) ........................................... Not Applicable
(b) ........................................... 508
(c) ........................................... 104(c)
sec. (1) ........................................... 503
317(a)
(a) (2) ........................................... 504
(b) ........................................... 1003
sec.318(a) ........................................... 107
</TABLE>
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 4
i
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE ONE -- DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION..................................... 1
Section 101. Definitions.................................. 1
Section 102. Compliance Certificates and Opinions......... 10
Section 103. Form of Documents Delivered to Trustee....... 11
Section 104. Acts of Holders; Record Dates................ 12
Section 105. Notices, Etc., to Trustee and Company........ 14
Section 106. Notice to Holders; Waiver.................... 14
Section 107. Conflict with Trust Indenture Act............ 15
Section 108. Effect of Headings and Table of Contents..... 15
Section 109. Successors and Assigns....................... 15
Section 110. Separability Clause.......................... 15
Section 111. Benefits of Indenture........................ 15
Section 112. Governing Law................................ 15
Section 113. Legal Holidays............................... 16
ARTICLE TWO -- SECURITY FORMS.................................. 16
Section 201. Forms Generally.............................. 16
Section 202. Form of Face of Security..................... 17
Section 203. Form of Reverse of Security.................. 19
Section 204. Form of Legend for Global Securities......... 24
Section 205. Form of Trustee's Certificate of
Authentication............................... 25
ARTICLE THREE -- THE SECURITIES................................ 25
Section 301. Amount Unlimited; Issuable in Series......... 25
Section 302. Denominations................................ 28
Section 303. Execution, Authentication, Delivery and
Dating....................................... 28
Section 304. Temporary Securities......................... 30
Section 305. Registration, Registration of Transfer and
Exchange..................................... 31
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities................................... 33
Section 307. Payment of Interest; Interest Rights
Preserved.................................... 34
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Section 308. Persons Deemed Owners........................ 36
Section 309. Cancellation................................. 36
Section 310. Computation of Interest...................... 37
ARTICLE FOUR -- SATISFACTION AND DISCHARGE..................... 37
Section 401. Satisfaction and Discharge of Indenture...... 37
Section 402. Application of Trust Money................... 39
ARTICLE FIVE -- REMEDIES....................................... 39
Section 501. Events of Default............................ 39
Section 502. Acceleration of Maturity; Rescission and
Annulment.................................... 42
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee....................... 43
Section 504. Trustee May File Proofs of Claim............. 44
Section 505. Trustee May Enforce Claims Without Possession
of Securities................................ 44
Section 506. Application of Money Collected............... 45
Section 507. Limitation on Suits.......................... 46
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.............. 47
Section 509. Restoration of Rights and Remedies........... 47
Section 510. Rights and Remedies Cumulative............... 48
Section 511. Delay or Omission Not Waiver................. 48
Section 512. Control by Holders........................... 48
Section 513. Waiver of Past Defaults...................... 49
Section 514. Undertaking for Costs........................ 49
Section 515. Waiver of Stay or Extension Laws............. 49
ARTICLE SIX -- THE TRUSTEE..................................... 50
Section 601. Certain Duties and Responsibilities.......... 50
Section 602. Notice of Defaults........................... 50
Section 603. Certain Rights of Trustee.................... 50
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Section 604. Not Responsible for Recitals or Issuance of
Securities................................... 51
Section 605. May Hold Securities.......................... 52
Section 606. Money Held in Trust.......................... 52
Section 607. Compensation and Reimbursement............... 52
Section 608. Disqualification; Conflicting Interests...... 53
Section 609. Corporate Trustee Required; Eligibility...... 53
Section 610. Resignation and Removal; Appointment of
Successor.................................... 54
Section 611. Acceptance of Appointment by Successor....... 55
Section 612. Merger, Conversion, Consolidation or
Succession to Business....................... 57
Section 613. Preferential Collection of Claims Against
Company...................................... 57
Section 614. Appointment of Authenticating Agent.......... 58
ARTICLE SEVEN -- HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY....................................... 60
Section 701. Company to Furnish Trustee Names and
Addresses of Holders......................... 60
Section 702. Preservation of Information; Communications
to Holders................................... 60
Section 703. Reports by Trustee........................... 61
Section 704. Reports by Company........................... 61
ARTICLE EIGHT -- CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
LEASE......................................... 61
Section 801. Company May Consolidate, Etc., Only on
Certain Terms................................ 61
Section 802. Successor Substituted........................ 62
ARTICLE NINE -- SUPPLEMENTAL INDENTURES........................ 63
Section 901. Supplemental Indentures Without Consent of
Holders...................................... 63
Section 902. Supplemental Indentures with Consent of
Holders...................................... 64
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Section 903. Execution of Supplemental Indentures......... 65
Section 904. Effect of Supplemental Indentures............ 65
Section 905. Conformity with Trust Indenture Act.......... 66
Section 906. Reference in Securities to Supplemental
Indentures................................... 66
ARTICLE TEN -- COVENANTS....................................... 66
Section 1001. Payment of Principal, Premium and Interest... 66
Section 1002. Maintenance of Office or Agency.............. 66
Section 1003. Money for Securities Payments to Be Held in
Trust........................................ 67
Section 1004. Statement by Officers as to Default.......... 68
Section 1005. Existence.................................... 68
Section 1006. Maintenance of Properties.................... 69
Section 1007. Payment of Taxes and Other Claims............ 69
Section 1008. Limitations on Liens......................... 69
Section 1009. Limitations on Sale and Lease-Back
Transactions................................. 72
Section 1010. Restrictions on Funded Debt of Restricted
Subsidiaries................................. 73
Section 1011. Waiver of Certain Covenants.................. 75
ARTICLE ELEVEN -- REDEMPTION OF SECURITIES..................... 75
Section 1101. Applicability of Article..................... 75
Section 1102. Election to Redeem; Notice to Trustee........ 76
Section 1103. Selection by Trustee of Securities to Be
Redeemed..................................... 76
Section 1104. Notice of Redemption......................... 77
Section 1105. Deposit of Redemption Price.................. 78
Section 1106. Securities Payable on Redemption Date........ 78
Section 1107. Securities Redeemed in Part.................. 78
ARTICLE TWELVE -- SINKING FUNDS................................ 79
Section 1201. Applicability of Article..................... 79
Section 1202. Satisfaction of Sinking Fund Payments with
Securities................................... 79
Section 1203. Redemption of Securities for Sinking Fund.... 80
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ARTICLE THIRTEEN -- DEFEASANCE AND COVENANT DEFEASANCE.........
80
Section 1301. Company's Option to Effect Defeasance or
Covenant Defeasance.......................... 80
Section 1302. Defeasance and Discharge..................... 80
Section 1303. Covenant Defeasance.......................... 81
Section 1304. Conditions to Defeasance or Covenant
Defeasance................................... 81
Section 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions..................... 83
Section 1306. Reinstatement................................ 84
ARTICLE FOURTEEN -- REPAYMENT AT OPTION OF SECURITY HOLDERS....
85
Section 1401. Applicability of Article..................... 85
Section 1402. Repayment of Securities...................... 85
Section 1403. Exercise of Option; Notice................... 85
Section 1404. Securities Payable on the Repayment Date..... 86
TESTIMONIUM.................................................... 87
SIGNATURES AND SEALS........................................... 87
ACKNOWLEDGEMENTS............................................... 87
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<PAGE> 9
INDENTURE, dated as of August 24, 1994, between APPLIED MATERIALS, INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 3050 Bowers
Avenue, Santa Clara, California 95054-3299, and HARRIS TRUST COMPANY OF
CALIFORNIA, a state trust company, duly organized and existing under the laws of
California, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
<PAGE> 10
2
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and
(4) 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.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" has the meaning specified in Section 1009.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act for it in respect thereof.
"Board Resolution" means a copy of one or more resolutions certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
<PAGE> 11
3
on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close, except as may otherwise be
provided in the form of Securities of any particular series pursuant to the
provisions of this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time, the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom: (a) all current liabilities except
for (1) notes and loans payable, (2) current maturities of long-term debt and
(3) current maturities of obligations under capital leases; and (b) to the
extent included in said aggregate amount of assets, all goodwill, trade names,
trademarks, patents, organization expenses, unamortized debt discount and
expenses (other than capitalized unamortized product development costs, such as,
without limitation, capitalized hardware and software development costs), to the
extent included in said aggregate amount of assets, all as set forth on the most
recent consolidated balance sheet of the Company and computed in accordance with
generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be conducted, which
office, at the date of execution of this Indenture, is located at 601 S.
Figueroa, Suite 4900, Los Angeles, California 90017.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
<PAGE> 12
4
"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt" has the meaning specified in Section 1008.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Domestic Receivables or Inventory" means accounts receivable arising from
the sale of inventory or inventory owned by the Company or any Subsidiary whose
principal place of business and place of incorporation is located in the United
States of America. For purposes hereof, inventory and receivables shall be
deemed to be "owned" if they are deemed to be assets of the Company or such
Subsidiary for purposes of generally accepted accounting principles.
"Equivalent Principal Terms" has the meaning specified in Section 1102.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempted Secured Debt" has the meaning specified in Section 1008.
"Funded Debt" means indebtedness created, assumed or guaranteed by a Person
for money borrowed which matures by its terms, or is renewable by the Borrower
to a date, more than one year after the date of original creation, assumption or
guarantee.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental
<PAGE> 13
5
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of the
particular series of Securities established as contemplated by Section 301;
provided, however, that if at any time more than one person is acting as Trustee
under this Indenture due to the appointment of one or more separate Trustees for
any one or more separate series of Securities, "Indenture" shall mean, with
respect to such series of Securities for which any such Person is Trustee, this
instrument as originally executed or as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of particular
series of Securities for which such person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such person had become such
Trustee, but to which such person, as such Trustee, was not a party; provided
further that in the event that this indenture is supplemented or amended by one
or more indentures supplemental hereto which are only applicable to certain
series of Securities, the term "Indenture" for a particular series of Securities
shall only include the supplemental indentures applicable thereto.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, exercise of option for
repayment or otherwise.
"mortgage" and "mortgages" have the respective meanings specified in
Section 1008.
"Notice of Default" means a written notice of the kind specified in
Sections 501(4), 501(5) and (501)(6).
<PAGE> 14
6
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), or other counsel
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which 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 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, (a) the principal amount
<PAGE> 15
7
of an Original Issue Discount Security that shall be deemed to be Outstanding
shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 502, (b) the principal amount of a Security denominated in
one or more foreign currencies or currency units shall be the U.S. dollar
equivalent, determined in the manner provided as contemplated by Section 301 on
the date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent on
the date of original issuance of such Security of the amount determined as
provided in (a) above) of such Security, and (c) Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver or
upon any such determination as to the presence of a quorum, only Securities
which the Trustee knows to be 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
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
<PAGE> 16
8
"Principal Property" means the land, land improvements, buildings and
fixtures (to the extent they constitute real property interests) (including any
leasehold interest therein) constituting the principal corporate office, any
manufacturing plant or any manufacturing facility, whether owned at the date of
this Indenture or thereafter acquired, and any equipment located thereon, which
(a) is owned by the Company or any Subsidiary, (b) is located within any of the
present 50 states of the United States of America (or the District of Columbia),
(c) has not been determined in good faith by the Board of Directors not to be of
material importance to the business conducted by the Company and its
Subsidiaries taken as a whole, and (d) has a book value on the date as of which
the determination is being made of in excess of 0.75% of Consolidated Net
Tangible Assets of the Company as most recently determined on or prior to such
date (including for purposes of such calculation the land, land improvements,
buildings and such fixtures comprising such office, plant or facility, as the
case may be).
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Repayment Date", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holders, means the date fixed for such
repayment by or pursuant to this Indenture.
"Repayment Price", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holder, means the price at which it is
to be repaid pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president or assistant vice
president or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers
<PAGE> 17
9
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary which owns any Principal
Property or any Domestic Receivables or Inventory; provided, however, that the
term "Restricted Subsidiary" shall not include any Subsidiary which is
principally engaged in financing the Company's operations outside the United
States of America; provided, further, that the term "Restricted Subsidiary"
shall not include any Subsidiary less than 80% of the voting stock of which is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries if the common
stock of such Subsidiary is traded on any national securities exchange or quoted
on the NASDAQ National Market or over the counter. For purposes of this
definition, "voting stock" has the meaning specified in the definition of
"Subsidiary," below.
"Sale and Lease-Back" has the meaning specified in Section 1009.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation more than 66 2/3% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
905; provided, however, that in the event the Trust Indenture Act of
<PAGE> 18
10
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall 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 Securities of that series.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case under clauses (a) or (b) are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion
<PAGE> 19
11
of Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than those provided for in
Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
related thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual, 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
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the
<PAGE> 20
12
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are received by the Trustee and,
where it is hereby expressly required, by the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgements of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the
<PAGE> 21
13
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder only by Holders of a requisite
principal amount of Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder shall be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents). On or prior to any expiration date
set pursuant to this paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this paragraph shall
prevent any Holder (or any duly appointed agent thereof) from giving or taking,
after any expiration date, any action identical to, or, at any time, contrary to
or different from, any action given or taken, or purported to have been given or
taken, hereunder by a Holder on or prior to such date, in which event the
Company may set a record date in respect thereof pursuant to this paragraph.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so
<PAGE> 22
14
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration provided, however, that such notice shall not be
deemed to be given until received by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company; provided, however, that
such notice shall not be deemed to be given until received by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to 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.
<PAGE> 23
15
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 24
16
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date or Stated Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture or the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date, Redemption Date, Repayment Date or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity,
as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution 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 such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities 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, as evidenced by their execution of
such Securities.
<PAGE> 25
17
SECTION 202. Form of Face of Security.
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
------------------------------------------------------------
- --------------------------------------------------------------------------------
No. $
APPLIED MATERIALS, INC., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered
assigns, the principal sum of Dollars on
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY,
INSERT --, and to pay interest thereon from or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on and in
each year, commencing , at the rate of % per annum,
until the principal hereof is paid or made available for payment [IF APPLICABLE,
INSERT --, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of % per annum on any overdue principal and
premium and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the
or (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided is said Indenture.]
<PAGE> 26
18
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption, upon
repayment or at Stated Maturity and in such case the overdue principal of this
Security shall bear interest at the rate of % per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of principal of (and premium, if any) and [IF APPLICABLE,
INSERT -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in , in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. In the event the Global
Security representing the Securities becomes exchangeable for definitive
Securities pursuant to the terms of the Indenture, at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
[IF APPLICABLE, INSERT -- So long as all of the Securities of this series
are represented by Global Securities, the principal of, premium, if any, and
interest, if any, on this Global Security shall be paid in same day funds to the
Depositary, or to such name or entity as is requested by an authorized
representative of the Depositary. If at any time the Securities of this series
are no longer represented by the Global Securities and are issued in definitive
form ("Certificated Securities"), then the principal of, premium, if any, and
interest, if any, on each Certificated Security at Maturity shall be paid in
same day funds to the Holder upon surrender of such Certificated Security at the
Corporate Trust Office of the Trustee, or at such other place or places as may
be designated in or pursuant to the Indenture, provided that such Certificated
Security is surrendered to the Trustee, acting as Paying Agent, in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest with respect to Certificated Securities
<PAGE> 27
19
other than at Maturity may, at the option of the Company, be made by check
mailed to the address of the Person entitled thereto as it appears on the
Security Register on the relevant Regular or Special Record Date or by wire
transfer in same day funds to such account as may have been appropriately
designated to the Paying Agent by such Person in writing not later than such
relevant Regular or Special Record Date.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereof has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
APPLIED MATERIALS, INC.
By
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August , 1994 (herein called the
"Indenture"), between the Company and Harris Trust Company of California, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate amount to $ ].
<PAGE> 28
20
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT --
(1) on in any year commencing with the year and
ending with the year through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, and (2)] at
any time [on or after , 19 ], as a whole or in part,
at the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before
, %, and if redeemed] during the 12 month period
beginning of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on
in any year commencing with the year and ending
with the year through operation of the sinking fund for this series
at the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after ], as a
<PAGE> 29
21
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning of the years
indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE
THROUGH OPERATION THAN THROUGH OPERATION
YEAR OF THE SINKING FUND OF THE SINKING FUND
- ---- ------------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
, redeem any Securities of this series as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than % per annum.]
[The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending
with the year of [not less than $ ("mandatory sinking
fund") and not more than] $ aggregate principal amount of Securities
of this series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[IF THE SECURITY IS TO BE SUBJECT TO REPAYMENT AT THE OPTION OF THE HOLDER,
INSERT -- To be repaid at the option of the Holder, the Company must receive
<PAGE> 30
22
this Security, with the form of "Option to Elect Repayment" hereon duly
completed, at an office or agency of the Company maintained for that purpose in
(or at such other place of which the Company shall from
time to time notify the Holder of this Security) not less than nor
more than days prior to the Repayment Date. The exercise of the
repayment option by the Holder shall be irrevocable.]
[IF THE SECURITY IS SUBJECT TO REDEMPTION, INSERT -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration
<PAGE> 31
23
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
[IF APPLICABLE, INSERT -- Each of the defeasance and covenant defeasance
provisions of Article Thirteen of the Indenture shall apply to this Security.]
No reference herein to the Indenture and no provision of this Security 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 Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall for all purposes be governed by and construed in
accordance with the laws of the State of New York.
The terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE> 32
24
[FORM OF OPTION TO ELECT REPAYMENT.]
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Security (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Repayment Date, to the undersigned, at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address of the Undersigned)
For this Security to be repaid, the Company must receive this Security,
with this "Option to Elect Repayment" form duly completed, at an office or
agency of the Company maintained for that purpose in , or at
such other place of which the Company shall from time to time notify the Holder,
no less than days nor more than days prior to [ , . . .
or ] [the or (commencing on
)].
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be $ , or an
integral multiple of $ ) which the Holder elects to have repaid:
$ .
Dated: ----------------------------------------
Note: The signature must correspond with
the name as written upon the face of the
Security in every particular without
alteration or enlargement
SECTION 204. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder may bear any
legend required to comply with the requirements of any Depositary.
<PAGE> 33
25
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
HARRIS TRUST COMPANY OF CALIFORNIA
As Trustee
By
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. 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 from time to time in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in a manner provided, in an Officer's
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series which 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 304, 305, 306, 906, 1107 or 1404 and except for
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
<PAGE> 34
26
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates are determined,
the date or dates from which such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable on any Securities
and the Regular Record Date for any interest payable on any Interest
Payment Date, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable and where the
Securities of any series may be surrendered for registration of transfer;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed or repaid, as the case may be, in whole or in part, at the option
of the Holders;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation, and any provisions for the
remarketing of such Securities;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
"Outstanding" in Section 101;
<PAGE> 35
27
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, formula or other method, the manner in which such amounts
shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) 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 pursuant to Section
502;
(14) if applicable, that the Securities of such series shall be
defeasible as provided in Article Thirteen;
(15) if and as applicable, that the Securities of such series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the Depositary or Depositaries for such Global Security
or Global Securities and any circumstances other than those set forth in
Section 305 in which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of, a Person
other than the Depositary for such Global Security or a nominee thereof and
in which such transfer may be registered;
(16) the Person who shall be the Security Registrar, if other than the
Trustee, and the Person who will be the Paying Agent;
(17) if applicable, any Events of Default with respect to Securities
of such series, to the extent that such Events of Default are in addition
to the Events of Default herein contained;
(18) if other than the date of original issuance by the Company of
Securities of such series, such other date as is applicable to the
Securities of such series for purposes of Section 1010.
<PAGE> 36
28
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to 303) set forth, or determined
in the manner provided, in the Officer's Certificate referred to above or in any
such indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be reopened
for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
<PAGE> 37
29
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order (which may provide that Securities that are the subject
thereof will be authenticated and delivered by the Trustee from time to time
upon the telephonic or written order of Persons designated in said Company Order
and that such Persons are authorized to determine such terms and conditions of
said Securities as are specified in the Company Order) shall authenticate and
deliver such Securities. If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(1) if the form of such Securities has been established by or pursuant
to a Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to a Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
and to such other matters as counsel may specify.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required
<PAGE> 38
30
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraph at or prior to the time
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued and contemplate issuance of all Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. -- Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for that series for the purpose of exchanges of Securities of such
series, without charge to the Holder. Upon surrender for cancellation of any
<PAGE> 39
31
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. -- Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be maintained
by the Company in accordance with Section 1002 a register (being the combined
register of the Security Registrar and all transfer agents designated pursuant
to Section 1002 for the purpose of registration of transfer of Securities and
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency maintained pursuant to Section 1002 for such purpose in
a Place of Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form
<PAGE> 40
32
satisfactory to the Company and the Security Registrar duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1404 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (b) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, any Global Security
shall be exchangeable pursuant to this Section 305 for Securities registered in
the names of Persons other than the Depositary for such Global Security or its
nominee only when (a) such Depositary notifies the Company and the Trustee in
writing that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and a successor Depositary is not appointed
by the Company within 90 days, (b) the Company in its sole discretion determines
that Securities shall no longer be represented by a Global Security and executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable, (c) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to the Securities represented
by such Global Security or (d) there shall exist such other circumstances, if
any, as shall be specified for this purpose as contemplated by Section 301. Any
Global Security that is exchangeable pursuant to clause (a), (b), (c) or (d)
above, shall be surrendered by the Depositary, or such other depositary as shall
be specified in the Company Order with respect thereto, to the Trustee, as the
agent for such purpose, to be exchanged, in whole or in part, for definitive
Securities without charge, and the Trustee shall authenticate and deliver, in
exchange for each portion of such permanent Global Security, an equal aggregate
principal amount of definitive Securities,
<PAGE> 41
33
executed by the Company, of the same series of authorized denominations and of
like tenor as the portion of such Global Security to be exchanged, which
shall be in the form of registered Securities as provided in the Company Order.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security other than pursuant to
clauses (a), (b), (c) or (d) in the preceding paragraph, whether pursuant to
this Section, Sections 304, 306, 906, 1107 or 1404 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security.
SECTION 306. -- Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence to
their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company 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) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled
<PAGE> 42
34
to all the benefits of this Indenture equally and proportionately with any and
all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
In the case of Securities represented by a Global Security registered in
the name of or held by a Depositary or its nominee, unless otherwise specified
by Section 301, payment of principal, premium, if any, and interest, if any,
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or Holder of such Global Security. None of the Company, the
Trustee, any Paying Agent, any Authenticating Agent nor the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the
<PAGE> 43
35
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice is given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable
by the Trustee.
At the option of the Company, interest on Securities of any series that
bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register, except
as otherwise provided pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
<PAGE> 44
36
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and (except
as otherwise specified as contemplated by Section 301(3) and subject to Section
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
In the case of a Global Security, so long as the Depositary for such Global
Security, or its nominee, is the registered owner of such Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or Holder of the Securities represented by such Global Security for all
purposes under this Indenture. Except as provided in Section 305, owners of
beneficial interests in a Global Security will not be entitled to have
Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall (a) prevent the Company, the Trustee, or any agent of the Company
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or (b) impair, as between a Depositary
and holders of beneficial interests in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary as
Holder of such Global Security.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security issued in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
<PAGE> 45
37
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its customary practices and the Trustee shall from time to time, or upon
request by the Company, deliver to the Company certificates of destruction with
respect thereto.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
<PAGE> 46
38
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year and are not repayable at the option of the Holder
prior thereto, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company and are not repayable at the option of the Holder
prior thereto,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose, lawful money of the United States or U.S.
Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide lawful money not later than the due dates of principal (and
premium, if any) or interest, or any combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to the
Securities of all series to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
<PAGE> 47
39
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
401 shall be held in trust and applied by it (without liability, in the case of
monies, for the payment of interest thereon or the investment thereof, except as
otherwise agreed to by the Company and the Trustee for the exclusive benefit of
the Company), in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (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),
except to the extent such event is specifically deleted or modified as
contemplated by Section 301 for the Securities of that series:
(1) default in the payment of any interest upon any Security of that
series when it become due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
<PAGE> 48
40
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is specifically dealt with
elsewhere in this Section or which has expressly been included in this
Indenture solely for the benefit of a series of Securities other than that
series or which has been included in this Indenture but not made applicable
to the Securities of such series), and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 15% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) failure by the Company to make any payment at maturity, including
any applicable grace period, in respect of indebtedness, which term as used
herein means obligations (other than the Securities of such series or
non-recourse obligations) of the Company for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments ("Indebtedness") in
an amount in excess of $10,000,000 or the equivalent thereof in any other
currency or composite currency and such failure shall have continued for
thirty (30) days after written notice thereof shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 15% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) a default with respect to any Indebtedness, which default results
in the acceleration of Indebtedness in an amount in excess of $10,000,000
or the equivalent thereof in any other currency or composite currency
without such Indebtedness having been discharged or such acceleration
having been cured, waived, rescinded or annulled for a period of thirty
(30) days after written notice thereof shall have been given to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
15% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
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(7) the entry by a court having jurisdiction in the premises of (a) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (b) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its properties, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(8) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law,
or the consent by the Company to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its properties, or the making by the Company of
an assignment for the benefit of creditors, or the admission by the Company
in writing its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(9) any other Event of Default established as contemplated by Section
301 with respect to Securities of that series.
provided that if any such failure, default or acceleration referred to in
clauses (5) or (6) above shall cease or be cured, waived, rescinded or annulled,
then the Event of Default hereunder by reason thereof shall be deemed likewise
to have been thereupon cured.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities, to the extent that payment of
such interest is lawful,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
<PAGE> 51
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which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series, and any such default continues for any period of
grace provided with respect to the Securities of such series.
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holder of any such Security (or the Holders of any such series in the case of
clause (3) above), the whole amount then due and payable on any such Security
(or on the Securities of any such series in the case of clause (3) above) for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor by
the terms of any such Security (or of Securities of any such series in the case
of clause (3) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts owing the Trustee under Section
607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceedings to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner
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provided by law out of the property of the Company or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
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Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.
In any case where Securities are outstanding which are denominated in more
than one currency, or in a composite currency and at least one other currency,
and the Trustee is directed to make ratable payments under this Section to
Holders of Securities, the Trustee shall calculate the amount of such payments
as follows: (i) as of the day the Trustee collects an amount under this Article,
the Trustee shall, as to each Holder of a Security to whom an amount is due and
payable under this Section which is denominated in a foreign currency or a
composite currency, determine that amount of U.S. Dollars that would be obtained
for the amount owing such Holder, using the rate of exchange at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York U.S. Dollars with such amount owing, (ii) calculate the sum of all
U.S. Dollar amounts determined under (i) and add thereto any amounts due and
payable in U.S. Dollars; and
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(iii) using the individual amounts determined in (i) or any individual amounts
due and payable in U.S. Dollars, as the case may be, as a numerator and the sum
calculated in (ii) as a denominator, calculate as to each Holder of a Security
to whom an amount is owed under this Section the fraction of the amount
collected under this Article payable to such Holder. Any expenses incurred by
the Trustee in actually converting amounts owing Holders of Securities
denominated in a currency or composite currency other than that in which any
amount is collected under this Article shall be likewise (in accordance with
this paragraph) borne ratably by all Holders of Securities to whom amounts are
payable under this Section.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or any premium or interest on the
Securities of any series (the "Required Currency") into a currency in which
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 New York Business Day preceding that on which final
judgment is given. The Company shall not be liable for any shortfall nor shall
it benefit from any windfall in payments to Holders of Securities under this
Section caused by a change in exchange rates between the time the amount of a
judgment against it is calculated as above and the time the Trustee converts the
Judgment Currency into the Required Currency to make payments under this Section
to Holders of Securities, but payment of such judgment shall discharge all
amounts owed by the Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (except as specified as
contemplated by Section 301(3) and subject to Section 307) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders 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.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series 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, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine (it being understood that the
Trustee shall have no obligation to make such determination) that the
action so directed would be unjustly prejudicial to Holders of Securities
of that series, or any other series, not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not 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.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing (but subject to Section 107),
no provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default known to the Trustee as and to the extent provided by the Trust
Indenture Act and in the manner provided in Section 106; provided, however, that
in the case of any default of the character specified in Sections 501(4), 501(5)
and 501(6) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and
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any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture (including, without
limitation, under Section 512), unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
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and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for investment of or interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence or
bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder or the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or perform-
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ance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or
bad faith.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for payment of principal of (and premium, if any) or interest, if any,
on particular Securities.
"Trustee", for purposes of this Section 607, includes any predecessor
Trustee, provided that the negligence or bad faith of any Trustee shall not
affect the rights under this Section 607 of any other Trustee.
SECTION 608. Disqualification; Conflicting Interests.
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, and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein. For purposes of Section 301(b)(1) of the Trust Indenture Act,
no Trustee hereunder will be deemed to have a conflicting interest solely by
reason of being Trustee in respect of more than one series of Securities.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with respect to the
Securities of each series, which shall be a Person that is eligible pursuant to
the Trust Indenture Act to act as such, having a combined capital and surplus of
at least $5,000,000 and subject to supervision or examination by Federal or
State authority. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then, for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
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SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(A) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(B) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(C) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security 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 appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the
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request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) 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
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
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confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In the
event any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such
Securities, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 613. Preferential Collection of Claims Against Company.
Reference is made to Section 311 of the Trust Indenture Act. For purposes
of Sections 311(b)(4) and 311(b)(6) of the Trust Indenture Act, the following
terms shall have the following meanings:
"cash transaction" means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
acceptances and payable upon demand.
"self-liquidating paper" means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by
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documents evidencing title to, possession of or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or 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 and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $5,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an 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 such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
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Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
HARRIS TRUST COMPANY OF CALIFORNIA,
AS TRUSTEE
By: ,
As Authenticating Agent
By: ,
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semiannually, not later than 15 days after the Regular Record Date
for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities
as of such Regular Record Date (unless the Trustee has such information),
or if there is no Regular Record Date for interest for such series of
Securities, semi-annually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 701 and (ii) received by the Trustee for each series in the capacity as
Security Registrar if the Trustee is acting in such capacity. The Trustee may
destroy any list furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
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disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders of Securities, as their names and
addresses appear in the Security Register, such reports, if any, concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Any such reports required pursuant to Section 313(a) of the Trust Indenture Act
shall be transmitted on or about July 15, 1994 and on or about each July 15
thereafter and shall be dated not more than 60 days before such July 15.
(b) A copy of such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, if any, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
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(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall not apply to any Security of
any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section
1008 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
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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 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
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 modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date, as the case
may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
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for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1011, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1011, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(8).
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 the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but 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.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
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of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
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Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (a) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (b) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive, financial or accounting officer of the
Company as to his or her knowledge of the Company's compliance (without regard
to any period of grace or requirement of notice provided hereunder) with all
conditions and covenants hereof.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 1006. Maintenance of Properties.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any 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 (and to the extent)
in the judgment of the Company may be necessary or appropriate in connection
with its business; provided, however, that nothing in this Section shall prevent
the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, within
30 days after the Company shall have received notice that the same has become
delinquent (1) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a material lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings;
provided, further, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim unless
the failure to pay or discharge such tax, assessment, charge or claim would,
individually or in the aggregate with all such failures, have a material adverse
effect on the Company and its Subsidiaries taken as a whole.
SECTION 1008. Limitations on Liens.
(a) So long as any Securities of such series remain Outstanding, the
Company will not, nor will it permit any Restricted Subsidiary to, issue, incur,
create, assume or guarantee any debt for borrowed money (hereinafter in this
Article 10 referred to as "Debt"), secured by a mortgage, security interest,
pledge, lien, charge or other encumbrance (mortgages, security interests,
pledges, liens, charges and other encumbrances being hereinafter in this Article
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10, referred to as "mortgage" or "mortgages") upon any Principal Property or
Domestic Receivables or Inventory of the Company or any Restricted Subsidiary or
upon any shares of stock or indebtedness of any Restricted Subsidiary (whether
such Principal Property, or Domestic Receivables or Inventory, shares of stock
or indebtedness are now existing or owed or hereafter created or acquired)
without in any such case effectively providing concurrently with the issuance,
incurrence, creation, assumption or guaranty of any such Debt that the
Securities of such series Outstanding (together with, if the Company shall so
determine, any other indebtedness of or guarantee by the Company or such
Restricted Subsidiary ranking equally with the Securities of such series
Outstanding and then existing or thereafter created) shall be secured equally
and ratably with (or, at the Company's option, prior to) such Debt; provided,
however, that the foregoing restrictions shall not apply to Debt secured by:
(1) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary; provided that such mortgages are not incurred in
anticipation of such corporation becoming a Restricted Subsidiary;
(2) (A) mortgages on property, shares of stock, indebtedness or other
assets existing at the time of acquisition thereof by the Company or a
Restricted Subsidiary (which may include property previously leased by the
Company and leasehold interests thereon, provided that the lease terminates
prior to the acquisition) or mortgages thereon to secure the payment of all
or any part of the purchase price thereof, or (B) mortgages on property,
shares of stock, indebtedness or other assets to secure any Debt incurred
prior to, at the time of, or within 270 days after, the latest of the
acquisition thereof, or, in the case of property, the completion of
construction, the completion of improvements or the commencement of
substantial commercial operation of such property for the purpose of
financing all or any part of the purchase price thereof, such construction
or the making of such improvements;
(3) mortgages securing Debt owing to the Company or to a Restricted
Subsidiary;
(4) mortgages existing on the date of initial issuance of the
Securities of such series;
(5) mortgages on property or other assets of a corporation existing at
the time such corporation is merged into or consolidated with the Company
or a Restricted Subsidiary or at the time of a sale, lease or other
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disposition of the properties of a corporation as an entirety or
substantially as an entirety to the Company or a Restricted Subsidiary;
provided that such mortgage was not incurred in anticipation of such merger
or consolidation or sale, lease or other disposition;
(6) mortgages on or other conveyances of property or other assets
owned by the Company or a Restricted Subsidiary in favor of the United
States of America or any State, territory or possession thereof (or the
District of Columbia), or any department, agency, instrumentality or
political subdivision of the United States of America or any State,
territory or possession thereof (or the District of Columbia), to secure
partial, progress, advance or other payments pursuant to any contract or
statute or to secure any Debt incurred for the purpose of financing all or
any part of the purchase price or the cost of construction or improvement
of the property subject to such mortgages;
(7) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any mortgage referred to
in the foregoing clauses (1) to (6), inclusive, without increase of the
principal of the Debt secured thereby; provided, however, that such
extension, renewal or replacement shall be limited to all or a part of the
property which secured the mortgage so extended, renewed or replaced (plus
improvements on such property); and provided, further, that any mortgage
permitted by any of the foregoing clauses (1), (2), (3), (4), (5), and (6)
of this Section 1008 shall not extend to or cover any property of the
Company or such Restricted Subsidiary, as the case may be, other than the
property specified in such clauses and improvements thereto.
(b) Notwithstanding the foregoing provisions of this Section 1008, the
Company and any one or more Restricted Subsidiaries may issue, incur, create,
assume or guarantee Debt secured by mortgages which would otherwise be subject
to the foregoing restrictions ("Exempted Secured Debt") in an aggregate amount
which, together with all other outstanding Debt of the Company and its
Restricted Subsidiaries which (if originally issued, incurred, created, assumed
or guaranteed at such time) would otherwise be subject to the foregoing
restrictions (including Attributable Debt in respect of Sale and Lease-Backs as
provided in Section 1009, but not including Debt permitted to be secured under
any of clauses (1) through (7) above or Attributable Debt with respect to a Sale
and Lease-Back if Debt at least equal in amount to the Attributable Debt in
respect of such Sale and Lease-Back could have been issued, incurred, created,
assumed or guaranteed by the Company or one or
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more Restricted Subsidiaries under any of clauses (1) through (7) above), does
not at the time exceed 5% of Consolidated Net Tangible Assets of the Company.
SECTION 1009. Limitations on Sale and Lease-Back Transactions.
(a) So long as any Securities of such series remain Outstanding, the
Company will not, nor will it permit any Restricted Subsidiary to, enter into
any direct or indirect arrangement with any Person that provides for the leasing
to the Company or any Restricted Subsidiary of any Principal Property (except
for leases for a term of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries),
which Principal Property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such Person (such arrangement herein in this
Section 1009 referred to as a "Sale and Lease-Back"), unless:
(1) the Company or such Restricted Subsidiary would be entitled,
pursuant to the provisions of Section 1008, to issue, incur, create, assume
or guarantee Debt secured by a mortgage upon such property at least equal
in amount to the Attributable Debt in respect of such Sale and Lease-Back
without equally and ratably securing the Securities of such series
Outstanding; provided, however, that from and after the date on which such
Sale and Lease-Back becomes effective the Attributable Debt in respect of
such Sale and Lease-Back shall be deemed for all purposes under Section
1008 and this Section 1009 to be Debt subject to the provisions of Section
1008 (including, to the extent relying on the provisions of Section
1008(b), for purposes of calculating Exempted Secured Debt as provided in
Section 1008(b)); or
(2) within 180 days of the effective date of such Sale and Lease-Back,
the Company shall apply an amount in cash equal to the greater of the net
proceeds of the sale involved in such Sale and Lease-Back or the
Attributable Debt in respect of such Sale and Lease-Back either (or a
combination of) (i) to the retirement (other than any mandatory retirement,
mandatory prepayment or sinking fund payment or by way of payment at
maturity), of Debt of the Company or any Restricted Subsidiary (other than
Debt owed by the Company or any Restricted Subsidiary to the Company or any
Restricted Subsidiary or Debt which is subordinate to Securities of such
series Outstanding) which by its terms matures at or is extendible or
renewable at the option of the obligor to a date more than twelve months
after the date of the creation of such Debt,
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or (ii) to the purchase, construction or development (or any combination
thereof) of other comparable property.
(b) For the purposes of this Section 1009, the term "Attributable Debt"
with respect to a Sale and Lease-Back means, at the time of determination, the
lesser of:
(1) the fair market value of the property which is the subject of such
Sale and Lease-Back (as determined in good faith by the Board of Directors)
or;
(2) the then present value of the total net amount of rent required to
be paid under the lease in respect of such Sale and Lease-Back during the
remaining term thereof (including any renewal term or period for which such
lease has been extended) computed by discounting from the respective due
dates to such date such total net amount of rent at the actual interest
factor included in such rent or implicit in the terms of the applicable
Sale and Lease-Back, or, if not practicable to determine such rate, the
rate per annum equal to the weighted average interest rate per annum borne
by the Securities of each series outstanding pursuant to this Indenture
compounded semi-annually, in either case as determined in good faith by the
principal financial or accounting officer of the Company, which computation
shall be binding for purposes of this Indenture absent manifest error;
provided, however, that the net amount of rent required to be paid for any
such period shall be the aggregate amount of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of or contingent upon maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease
which is terminable by the lessee upon the payment of a penalty, such net
amount shall be the lesser of (i) the net amount determined assuming
termination upon the first date such lease may be terminated (in which case
the net amount shall also include the amount of the penalty, but no rent
shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated) or (ii) the net amount
determined assuming no such termination.
SECTION 1010. Restrictions on Funded Debt of Restricted Subsidiaries.
(a) So long as any Securities of such series remain Outstanding, the
Company will not permit any Restricted Subsidiary to create, incur, issue,
assume or guarantee any Funded Debt. This restriction will not apply if:
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(1) the Company or such Restricted Subsidiary would be entitled
pursuant to the provisions of Section 1008 to create Debt secured by
mortgages or pursuant to the provisions of Section 1009 to enter into a
Sale and Lease-Back involving Attributable Debt in an amount equal to such
Funded Debt, without equally and ratably securing the applicable series of
Securities; or
(2) such Funded Debt existed on the date of the original issuance by
the Company of any Securities of such series, or such other date as may be
specified in the Board Resolution, Officers' Certificate or the
supplemental indenture establishing the terms of the Securities of such
series pursuant to Section 301 prior to the issuance of any Securities of
such series for an applicable series of Securities issued pursuant to the
Indenture; or
(3) such Funded Debt is owed to the Company or any Subsidiary; or
(4) such Funded Debt existed at the time the corporation that issued
such Funded Debt became a Restricted Subsidiary, or was merged with or into
or consolidated with such Restricted Subsidiary; or at the time of a sale,
lease or other disposition of the properties of such corporation as an
entirety to such Restricted Subsidiary, or arising thereafter (a) otherwise
than in connection with the borrowing of money arranged thereafter and (b)
pursuant to contractual commitments entered into prior to and not in
contemplation of such corporation becoming a Restricted Subsidiary and not
in contemplation of such merger or consolidation or any such sale, lease or
other disposition; or
(5) such Funded Debt is issued, assumed or guaranteed in connection
with, or with a view to, compliance by such Restricted Subsidiary with the
requirements of any program adopted by any federal, state or local
governmental authority and applicable to such Restricted Subsidiary and
providing financial or tax benefits to such Restricted Subsidiary which are
not available directly to the Company; or
(6) such Funded Debt is issued, assumed or guaranteed to pay all or
any part of the purchase price or the construction cost of land, land
improvements, buildings, fixtures and equipment acquired by a Restricted
Subsidiary, provided such Funded Debt is incurred within 270 days after
acquisition, completion of construction or commencement of full operation
of such property, whichever is later; or
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(7) such Funded Debt is incurred for the purpose of extending,
renewing, substituting, replacing or refunding Funded Debt permitted by the
foregoing.
(b) Notwithstanding the foregoing provisions of this Section 1010, any
Restricted Subsidiary may create, incur, issue, assume or guarantee Funded
Debt which would otherwise be subject to the foregoing restrictions in an
aggregate principal amount which, together with the aggregate outstanding
principal amount of all other Funded Debt of Restricted Subsidiaries which
would otherwise be subject to the foregoing restrictions (not including
Funded Debt permitted to be incurred pursuant to any of clauses (1) through
(7) above), does not at the time such Funded Debt is incurred exceed an
amount equal to 5% of Consolidated Net Tangible Assets.
SECTION 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1008, 1009 and 1010 with respect to
the Securities of any series if before the time for such compliance the Holders
of at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
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SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series of the same tenor, the Company shall,
at least 60 days (45 days in the case of redemption of all Securities of any
series or of any series with the same (i) Stated Maturity, (ii) period or
periods within which, price or prices at which and terms and conditions upon
which such Securities may or shall be redeemed or purchased, in whole or in
part, at the option of the Company or pursuant to any sinking fund or analogous
provision or repayable at the option of the Holder and (iii) rate or rates at
which the Securities bear interest, if any, or formula pursuant to which such
rate or rates accrue (collectively, the "Equivalent Principal Terms")) prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities with Equivalent Principal Terms of any
series are to be redeemed (unless all of the Securities of such series and of a
specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series with Equivalent
Principal Terms or any integral multiple thereof) of the principal amount of
Securities of such series with Equivalent Principal Terms of a denomination
larger than the minimum authorized denomination for Securities of that series.
Unless otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal
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amount which remains outstanding shall not be less than the minimum authorized
denomination for Securities of such series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities 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 shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified in the Securities to be redeemed, to each
Holder of Securities to be redeemed, at his address appearing in the Security
Register.
Any notice that is mailed to the Holder of any Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder of such Security will
receive, without charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
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(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires,
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due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
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 Securities of any series is herein referred to as an "optional sinking
fund payment". The cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (a) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (b) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such Series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee
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at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering the crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
Section 1302 and/or Section 1303 shall apply to the Outstanding Securities
of any series to the extent specified as contemplated by Section 301 for
Securities of such series.
SECTION 1302. Defeasance and Discharge.
The Company shall be deemed to have been discharged from its obligations
with respect to the Outstanding Securities of such series as provided in this
Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all of its other obligations under the Securities of such series
and this Indenture insofar as the Securities of such series are concerned
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(and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Securities of such series to receive, solely from the trust fund
described in Section 1304 and as more fully set forth in such Section, payments
in respect of the principal of and any premium and interest on such Securities
of such series when payments are due, (b) the Company's obligations with respect
to the Securities of such series under Sections 304, 305, 306, 1002 and 1003,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and (d) this Article Thirteen. Subject to compliance with this Article Thirteen,
the Company may defease the Outstanding Securities of any series pursuant to
this Section 1302 notwithstanding the prior Defeasance of the Outstanding
Securities of such series pursuant to Section 1303.
SECTION 1303. Covenant Defeasance.
The Company shall be released from its obligations under Sections 1005
through 1010, inclusive, and the occurrence of any event specified in Sections
501(4) (with respect to any of Sections 1005 through 1010 inclusive) and 501(9)
shall be deemed not to be or result in an Event of Default, in each case with
respect to Outstanding Securities of any series as provided in this Section on
and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 501(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities of such series shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance pursuant to Section
1302 or Covenant Defeasance pursuant to Section 1303 of the Outstanding
Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust
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for the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
Outstanding Securities of such series, (A) money in an amount, or (B) U.S.
Government Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide,
not later than the due date of any payment, money in an amount, or (C) a
combination thereof, in each case 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 and
discharge each installment of principal (including mandatory sinking fund
payments and amounts that may be payable at the option of the Holder on any
Repayment Date) of, and premium (not relating to optional redemption), if
any, and interest on, the Outstanding Securities of such series on the
dates such installments of principal of, and premium (not relating to
optional redemption), if any, or interest are due.
(2) In the case of Defeasance under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date first set forth hereinabove,
there has been a change in the applicable Federal income tax law, in either
case (A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Securities of such series will
not recognize gain or loss for Federal income tax purposes as a result of
the deposit, Defeasance and discharge to be effected with respect to the
Securities of such series and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case
if such deposit, Defeasance and discharge were not to occur.
(3) In the case of Covenant Defeasance under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result
of the deposit and Covenant Defeasance to be effected with respect to the
Securities of such series and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case
if such deposit and Covenant Defeasance were not to occur.
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(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Securities of such series, if then
listed on any securities exchange, will not be delisted as a result of such
deposit.
(5) No Event of Default or event that (after notice or lapse of time
or both) would become an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 501(7) and (8), at any time
on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of the such
Act).
(7) Such Defeasance or Covenant Defeasance (including the deposit
pursuant to such Defeasance or Covenant Defeasance) shall not result in a
breach or violation of, or constitute a default under, the Indenture or any
other agreement or instrument to which the Company is a party or by which
it is bound.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
(9) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such
trust shall be qualified under such Act or exempt from regulation
thereunder.
SECTION 1305. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of the
Securities of any series shall be held in trust and applied by the Trustee, in
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accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.
The Company 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 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge that by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to Securities of any series that, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance with respect to the Securities of
such series.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Thirteen with respect to the Securities of any
series by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Thirteen with respect to Securities of such series until such time
as the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1305 with respect to Securities of such series in accordance
with this Article Thirteen; provided, however, that if the Company makes any
payment of principal of or any premium or interest on any Security of such
series following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of Securities of such series to receive
such payment from the money so held in trust.
<PAGE> 93
85
ARTICLE FOURTEEN
REPAYMENT AT OPTION OF SECURITY HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with their
terms and (except as otherwise contemplated by Section 301 for Securities of
such series) in accordance with this Article.
SECTION 1402. Repayment of Securities.
Each Security which is subject to repayment in whole or in part at the
option of the Holder thereof on a Repayment Date shall be repaid at the
applicable Repayment Price together with interest accrued to such Repayment Date
as specified pursuant to Section 301.
SECTION 1403. Exercise of Option; Notice.
Each Holder desiring to exercise his option for repayment shall, as
conditions to such repayment, surrender the Security to be repaid together with
all coupons, if any, appertaining thereto maturing after the Repayment Date and
with written notice of the exercise of such option at any office or agency of
the Company in a Place of Payment, not less than 15 nor more than 30 days prior
to the Repayment Date. Such notice, which shall be irrevocable, shall identify
the Security to be repaid and shall specify the principal amount of such
Security to be repaid, which shall be not less than the minimum authorized
denomination for such Security or an integral multiple thereof and, in the case
of a partial repayment of the Security, the denomination or denominations of the
Security or Securities with Equivalent Principal Terms to be issued to the
Holder for the portion of the principal of the Security surrendered which is not
to be repaid.
Any Security which is to be repaid only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities with Equivalent Principal Terms, of any
authorized denomination as requested by such Holder, in aggregate
<PAGE> 94
86
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the repayment of Securities shall relate, in the case
of any Security repaid or to be repaid only in part, to the portion of the
principal of such Security which has been or is to be repaid.
SECTION 1404. Securities Payable on the Repayment Date.
Notice of exercise of the option of repayment having been given and the
Securities so to be repaid having been surrendered as aforesaid, such Securities
shall, on the Repayment Date, become due and payable at the Repayment Price
therein specified and from and after such date (unless the Company shall default
in the payment of Repayment Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for repayment in
accordance with Section 1403, such Security shall be paid by the Company at the
Repayment Price, together with accrued interest to the Repayment Date; provided,
however, that, installments of interest on Securities whose Stated Maturity is
on or prior to the Repayment Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security duly surrendered for repayment shall not be so paid, the
principal and any premium shall, until paid, bear interest from the Repayment
Date at the rate prescribed therefor in the Security.
---------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE> 95
87
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 the day and year first above written.
APPLIED MATERIALS, INC.
By: /s/ JAMES C. MORGAN
Name: James C. Morgan
Title: Chairman and Chief Executive
[SEAL] Officer
Attest:
/s/ DONALD A. SLICHTER
- ------------------------------------------------
HARRIS TRUST COMPANY OF CALIFORNIA
By: /s/ ESTHER CERVANTES
Name: Esther Cervantes
Title: Assistant Vice President
[SEAL]
Attest:
/s/ MICHAEL O. GOEDECKE
- ------------------------------------------------
<PAGE> 1
EXHIBIT 4.3
[FACE OF SECURITY]
REGISTERED REGISTERED
NO.
CUSIP
APPLIED MATERIALS, INC.
MEDIUM-TERM NOTE, SERIES A
(Fixed Rate)
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY --This Note is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary. This
Global Security is exchangeable for Notes registered in the name of a Person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Note (other than a transfer
of this Note as a whole by the Depositary to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in such limited circumstances.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment hereon made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OF OID" (COMPUTED UNDER THE DESIGNATED METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON
THE REVERSE HEREOF:
PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
THIS NOTE IS A:
[ ] Global Note
[ ] Certificated Note
<PAGE> 2
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DISCOUNT NOTE: TOTAL AMOUNT OF OID: ISSUE PRICE (expressed as a percentage of
aggregate principal amount):
[ ] Yes [ ] No YIELD TO MATURITY:
INITIAL ACCRUAL PERIOD OID
AND DESIGNATED METHOD:
REDEMPTION DATE(S) (including any REDEMPTION PRICE(S): TERMS OF AMORTIZING NOTES:
applicable regular or special record dates):
REPAYMENT DATE(S) (including any REPAYMENT PRICE(S):
applicable regular or special record dates):
INTEREST RATE RESET OPTION: OPTIONAL RESET DATES (only BASIS FOR INTEREST RATE RESET
applicable if option to reset (only applicable if option to reset
[ ] Yes [ ] No interest rate): interest rate):
reset interest rate):
OTHER TERMS:
</TABLE>
APPLIED MATERIALS, INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to Cede & Co., as nominee
for The Depository Trust Company, or registered assigns, the Principal Amount
stated above on the Maturity Date shown above, and to pay interest thereon from
and including the Original Issue Date shown above or, in the case of a Note
issued upon registration of transfer or exchange, from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on ____________ and ___________ of each year and on the
Maturity Date, commencing on the first such Interest Payment Date next
succeeding the Original Issue Date, provided that if the Original Issue Date is
after a Regular Record Date and before the Interest Payment Date immediately
following such Regular Record Date, interest payments will commence on the
second Interest Payment Date following the Original Issue Date, at the rate per
annum set forth above, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the _________ or _____________ (whether or not a Business Day), as the
case may be, next preceding the Interest Payment Dates; provided, however, that
interest payable at Maturity will be payable to the Person to whom principal
shall be payable. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Notes of this series not
less than 10 days prior to such
2
<PAGE> 3
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes of this series may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.
Payment of principal of, premium, if any, and interest, if
any, on this Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. In the event the Global Security representing the Notes becomes
exchangeable for definitive Notes pursuant to the terms of the Indenture, at
the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register.
So long as all of the Notes of this series are represented by
Global Securities, the principal of, premium, if any, and interest, if any, on
this Global Security shall be paid in same day funds to the Depositary, or to
such name or entity as is requested by an authorized representative of the
Depositary. If at any time the Notes of this series are no longer represented
by the Global Securities and are issued in definitive form ("Certificated
Securities"), then the principal of, premium, if any, and interest, if any, on
each Certificated Security at Maturity shall be paid in same day funds to the
Holder upon surrender of such Certificated Security at the Corporate Trust
office of the Trustee, or at such other place or places as may be designated in
or pursuant to the Indenture, provided that such Certificated Security is
surrendered to the Trustee, acting as Paying Agent, in timer for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest with respect to Certificated Securities other
than at Maturity may, at the option of the Company, be made by check mailed to
the address of the Person entitled thereto as it appears on the Security
Register on the relevant Regular or Special Record Date or by wire transfer in
same day funds to such account as may have been appropriately designated to the
Paying Agent by such Person in writing not later than such relevant Regular or
Special Record Date.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, directly or through
an Authenticating Agent, by manual signature of an authorized signatory, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
3
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: APPLIED MATERIALS, INC.
[SEAL] By: _____________________________
Gerald F. Taylor
Senior Vice President
and Chief Financial Officer
ATTEST:
_________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series
designated therein referred to in the within
mentioned Indenture.
HARRIS TRUST COMPANY
OF CALIFORNIA, as Trustee
By ________________________________
Authorized Officer
4
<PAGE> 5
[BACK OF SECURITY]
APPLIED MATERIALS, INC.
MEDIUM-TERM NOTE, SERIES A
(Fixed Rate)
This Note is one of a duly authorized issue of securities of
the Company (herein called the "Notes"), issued and to be issued in one or more
series under an Indenture dated as of August 24, 1994 (herein called the
"Indenture"), between the Company and Harris Trust Company of California, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof. The Notes of this series may be denominated in
different currencies, bear different dates, mature at different times and bear
interest at different rates. The Notes of this series may be issued from time
to time in an aggregate principal amount of up to $______________, which amount
may be increased if duly authorized by the Company.
Interest payments for this Note will include interest accrued
from and including the last date in respect of which interest has been paid or
duly provided for (or from and including the Original Issue Date if no interest
has been paid or provided for) to but excluding the Interest Payment Dates.
Interest payments for this Note shall be computed and paid on the basis of a
360-day year of twelve 30-day months.
[INSERT IF THE COMPANY HAS THE OPTION TO RESET THE INTEREST
RATE --If the Company has the option with respect to this Note to reset the
interest rate, such option will be indicated on the face hereof, together with
(i) the date or dates on which such interest rate may be reset (each an
"Optional Reset Date") and (ii) the basis or formula, if any, for such
resetting. The Company may exercise such option by notifying the Trustee of
such exercise at least 45 but not more than 60 days prior to an Optional Reset
Date. Not later than 40 days prior to such Optional Reset Date, the Trustee
will mail to the Holder hereof a notice (the "Reset Notice"), first class,
postage prepaid, setting forth (i) the election of the Company to reset the
interest rate, (ii) such new interest rate, and (iii) the provisions, if any,
for redemption during the period from such Optional Reset Date to the next
Optional Reset Date or, if there is no such next Optional Reset Date, to the
Stated Maturity of this Note (each such period a "Subsequent Interest Period"),
including the date or dates on which or the period or periods during which and
the price or prices at which such redemption may occur during such Subsequent
Interest Period.
5
<PAGE> 6
Notwithstanding the foregoing, not later than 20 days prior to
an Optional Reset Date, the Company may, at its option, revoke the interest
rate provided for in the Reset Notice and establish a higher interest rate for
the Subsequent Interest Period commencing on such Optional Reset Date by
mailing or causing the Trustee to mail notice of such higher interest rate
first class, postage prepaid, to the Holder hereof. Such notice shall be
irrevocable. If the interest rate is reset on an Optional Reset Date this Note
will bear such higher interest rate.
If the Company elects to reset the interest rate of this Note,
the Holder hereof will have the option to elect repayment of this Note by the
Company on any Optional Reset Date at a price equal to the principal amount
hereof plus any accrued interest to such Optional Reset Date. In order for
this Note to be so repaid on an Optional Reset Date, the Holder hereof must
follow the procedures set forth below for optional repayment, except that the
period for delivery of this Note or notification to the Trustee shall be at
least 25 but not more than 35 days prior to such Optional Reset Date and except
that a Holder who has tendered this Note for repayment pursuant to a Reset
Notice may, by written notice to the Trustee, revoke any such tender for
repayment until the close of business on the tenth day prior to such Optional
Reset Date.]
[IF REDEEMABLE AT THE OPTION OF THE COMPANY INSERT -- Unless
one or more Redemption Dates is specified on the face hereof, this Note shall
not be redeemable at the option of the Company before the Maturity Date
specified on the face hereof. If one or more Redemption Dates (or ranges of
Redemption Dates) is so specified, this Note is subject to redemption on any
such date (or during any such range) at the option of the Company, upon notice
by first-class mail, mailed not less than 30 days nor more than 60 days prior
to the Redemption Date specified in such notice, at the applicable Redemption
Price specified on the face hereof (expressed as a percentage of the principal
amount of this Note), together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated
Maturity is prior to the Redemption Date will be payable to the Holder of this
Note, or one or more predecessor Notes, of record at the close of business on
the relevant Regular or Special Record Dates referred to on the face hereof,
all as provided in the Indenture. The Company may elect to redeem less than
the entire principal amount hereof, provided that the principal amount, if any,
of this Note that remains outstanding after such redemption is an authorized
denomination.]
[IF REPAYABLE AT THE OPTION OF THE HOLDER INSERT --Unless one
or more Repayment Dates is specified on the face hereof and except as provided
above, this Note shall not be repayable at the option of the Holder on any date
prior to the Maturity Date specified on the face hereof. If one or more
Repayment Dates (or ranges of Repayment Dates) is so specified,
6
<PAGE> 7
this Note is subject to repayment on any such date (or during any such range)
at the option of the Holder at the applicable Repayment Price specified on the
face hereof (expressed as a percentage of the principal amount of this Note),
together in the case of any such repayment with accrued interest to the
Repayment Date, but interest installments whose Stated Maturity is prior to the
Repayment Date will be payable to the Holder of this Note, or one or more
predecessor Notes, of record at the close of business on the relevant Regular
or Special Record Dates referred to on the face hereof, all as provided in the
Indenture. For this Note to be repaid at the option of the Holder, the Trustee
must receive at the principal office of its Corporate Trust Department in
___________________, at least 15 days but not more than 30 days prior to the
Repayment Date on which this Note is to be repaid, this Note and a statement
that the option to elect repayment is being exercised thereby. Exercise of the
repayment option by the Holder shall be irrevocable except to the extent
permitted in connection with an interest rate reset or an extension of
maturity, each as described above. The repayment option with respect to this
Note may be exercised by the Holder for less than the entire principal amount
hereof, provided that the principal amount, if any, of this Note that remains
outstanding after such repayment is an Authorized Denomination as defined
herein.]
[In the event of redemption or repayment of this Note in part
only, the principal amount shall be reduced.]
If an Event of Default with respect to Notes of this series
shall occur and be continuing, the principal of the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Unless otherwise specified on the face hereof, if any Original
Issue Discount Note (as defined below) is redeemed by the Company or repaid at
the option of the Holder, each as described above, or if the principal of any
Original Issue Discount Note is declared to be due and payable immediately
pursuant to this paragraph, the amount of principal due and payable with
respect to this Note shall be limited to the sum of the aggregate principal
amount of this Note multiplied by the Issue Price (expressed as a percentage of
the aggregate principal amount) plus the original issue discount accrued from
the date of issue to the date of redemption, repayment or declaration, as
applicable, which accrual shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles) in
effect on the date of redemption, repayment or declaration. Unless otherwise
specified on the face hereof, an Original Issue Discount Note is a Note which
has a principal amount payable on the Maturity Date that exceeds its Issue
Price by at least 0.25% of its principal amount payable on the Maturity Date,
multiplied by the number of complete years from the Original Issue Date to the
Maturity Date for this Note.
7
<PAGE> 8
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes of each
series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in
principal amount of the Notes at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of not
less than a majority in principal amount of the Notes of each series at the
time Outstanding on behalf of the Holders of all Notes of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest on this Note at the times, places and rate, and in the coin
or currency, herein prescribed. However, the Indenture limits the Holder's
right to enforce the Indenture and this Note.
As provided in the Indenture and subject to certain
limitations set forth therein and as may be set forth on the face hereof, the
transfer of this Note is registrable in the Security Register, upon surrender
of this Note for registration of transfer at the office or agency of the
Company in any place where the principal of (and premium, if any) and interest
on this Note are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes of this series of like tenor,
of Authorized Denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
Each of the defeasance and covenant defeasance provisons of
Article Thirteen of the Indenture shall apply to this Note.
The Notes of this series are issuable in denominations of U.S.
$1,000 and any integral multiple of U.S. $1,000 in excess thereof. As provided
in the Indenture and subject to certain limitations set forth therein and as
may be set forth on the face hereof, Notes of this series are exchangeable for
a like aggregate principal amount of Notes of this series of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
8
<PAGE> 9
"Business Day" shall mean any day that is not a Saturday or
Sunday and that, in The City of New York, is not a day on which banking
institutions generally are authorized or obligated by law to close.
The Notes of this series may be issued in the form of one or
more Global Securities to The Depository Trust Company as depositary for the
Global Securities of this series (the "Depositary") or its nominee and
registered in the name of the Depositary or such nominee.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note is overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Indenture and the Notes shall be governed by and construed
in accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
9
<PAGE> 10
____________________
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
UNIF GIFT MIN ACT - ______________ Custodian ______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
___________________________________
(State)
Additional abbreviations may also be used though not in the above list.
_________________________
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 TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
_________________________________________________________________ the
within Note and all rights thereunder, hereby irrevocably constituting and
appointing _____________________________________
_________________________________________________________________ attorney to
transfer said Note on the books of the Company, 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
instrument in every particular, without
alteration or enlargement or
any change whatever.
10
<PAGE> 1
Exhibit 5.1
June 16, 1995
Applied Materials, Inc.
3050 Bowers Avenue
Santa Clara, California 95054
Re: Applied Materials, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement"), in the form to be filed by Applied Materials,
Inc. (the "Company") with the Securities and Exchange Commission in connection
with the registration under the Securities Act of 1933, as amended (the "Act"),
of the Company's senior debt securities (the "Senior Debt Securities") and the
Company's Common Stock (the "Common Stock"), with an aggregate offering price
of up to $600,000,000 or the equivalent thereof in one or more foreign
currencies or composite currencies. The Senior Debt Securities are to be
issued under an Indenture, which has been filed as an exhibit to the
Registration Statement (the "Indenture") between the Company and Harris Trust
Company of California, as Trustee (the "Trustee"). The Common Stock and the
Senior Debt Securities are to be issued pursuant to an Underwriting Agreement
(the "Underwriting Agreement"), in the form filed as an exhibit to the
Registration Statement. The Senior Debt Securities are to be issued in the
form filed as an exhibit to the Registration Statement. The Senior Debt
Securities and the Common Stock are to be sold from time to time as set forth
in the Registration Statement, the Prospectus contained therein (the
"Prospectus") and the supplements to the Prospectus (the "Prospectus
Supplements").
We have examined instruments, documents and records which we deemed relevant
and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed the following: (a) the authenticity of original
documents and the genuineness of all signatures; (b) the conformity to the
originals of all documents submitted to us as copies; and (c) the truth,
accuracy, and completeness of the
<PAGE> 2
Applied Materials, Inc.
June 16, 1995
Page 2
information, representations and warranties contained in the records,
documents, instruments and certificates we have reviewed.
Based on such examination, we are of the opinion that:
1. When the issuance of Senior Debt Securities has been duly authorized by
appropriate corporate action and the Senior Debt Securities, in the form filed
as an exhibit to the Registration Statement, have been duly completed,
executed, authenticated and delivered in accordance with the Indenture and sold
pursuant to the Underwriting Agreement and as described in the Registration
Statement, any amendment thereto, the Prospectus and any Prospectus Supplement
relating thereto, the Senior Debt Securities will be legal, valid and binding
obligations of the Company, entitled to the benefits of such Indenture.
2. When the issuance of the Common Stock has been duly authorized by
appropriate corporate action and the Common Stock has been duly issued, sold
and delivered in accordance with the Underwriting Agreement and as described in
the Registration Statement, any amendment thereto, the Prospectus and the
Prospectus Supplement relating thereto, the Common Stock will be legally
issued, fully paid, and nonassessable.
Our opinion that any document is legal, valid and binding is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the rights of creditors generally; and
(b) general principles of equity, including without limitation concepts of
materiality, reasonableness, good faith and fair dealing, and the possible
unavailability of specific performance or injunctive relief, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
<PAGE> 3
Applied Materials, Inc.
June 16, 1995
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and to the use of our name wherever it
appears in the Registration Statement, the Prospectus, the Prospectus
Supplement, and in any amendment or supplement thereto. In giving such
consent, we do not believe that we are "experts" within the meaning of such
term as used in the Act or the rules and regulations of the Securities and
Exchange Commission issued thereunder with respect to any part of the
Registration Statement, including this opinion as an exhibit or otherwise.
Very truly yours,
/s/ ORRICK, HERRINGTON & SUTCLIFFE
ORRICK, HERRINGTON & SUTCLIFFE
<PAGE> 1
EXHIBIT 12.1
APPLIED MATERIALS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------
APRIL FISCAL YEAR ENDED(1)
30, MAY 1, ---------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- ------- ------- -------
(IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income from consolidated
companies before
provision for income
taxes and cumulative
effect of accounting
change.................. $245,296 $145,888 $334,497 $153,558 $58,925 $40,355 $54,084
Fixed charges:
Interest expense........ 11,634 7,120 15,962 14,206 15,207 13,969 6,717
Interest component of
rent expense(1)...... 8,171 5,473 11,070 9,021 7,197 5,968 4,344
-------- -------- -------- -------- ------- ------- -------
Total fixed
charges............ 19,805 12,593 27,032 23,227 22,404 19,937 11,061
-------- -------- -------- -------- ------- ------- -------
Income from consolidated
companies before income
taxes and cumulative
effect of accounting
change plus fixed
charges................. $265,101 $158,481 $361,529 $176,785 $81,329 $60,292 $65,145
======== ======== ======== ======== ======= ======= =======
Ratio of earnings to fixed
charges................. 13.39x 12.58x 13.37x 7.61x 3.63x 3.02x 5.89x
======== ======== ======== ======== ======= ======= =======
</TABLE>
- ------------
(1) For leases where the interest factor can be specifically identified, the
actual interest factor was used. For all other leases, the interest factor
is estimated at one-third of total rent expense for the applicable period,
which management believes represents a reasonable approximation of the
interest factor. Amounts exclude the Company's proportional share of the
earnings and fixed charges of the joint venture, which are insignificant.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
November 23, 1994, which appears on page 47 of the Annual Report to Stockholders
of Applied Materials, Inc. for the year ended October 30, 1994, which is
incorporated by reference in Applied Materials Inc.'s Annual Report on Form 10-K
for the year ended October 30, 1994. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules, which appears on
page 21 of such Annual Report on Form 10-K. We also consent to the references to
us under the headings "Experts" and "Selected Consolidated Financial Data" in
such Prospectus. However, it should be noted that Price Waterhouse LLP has not
prepared or certified such "Selected Consolidated Financial Data."
PRICE WATERHOUSE LLP
June 15, 1995
San Jose, California
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned directors and officers of Applied Materials, Inc., a
Delaware corporation (the "Company") constitute and appoint James C. Morgan
and Gerald F. Taylor, and each one of them with full power to act without the
other, such person's true and lawful attorneys-in-fact, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to execute in the name and on behalf of the undersigned
as such director or officer a Registration Statement on Form S-3 or other
appropriate form, under the Securities Act of 1933, as amended, with respect to
shares of Common Stock and Debt Securities of the Company, and any and all
amendments (including post-effective amendments) to such Registration
Statement, and to file such Registration Statement and any and all amendments
thereto, with exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing necessary or desirable to be done in and about the
premises, as fully to all intents and purposes, as he might or could do in
person, thereby ratifying and confirming all that said attorneys-in-fact, or
any of them or their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of June 1995.
<TABLE>
<S> <C>
/s/ JAMES C. MORGAN
- -------------------------------- ---------------------------------
Michael H. Armacost James C. Morgan
Director Chairman, Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ HERBERT M. DWIGHT, JR.
- ---------------------------------
Herbert M. Dwight, Jr.
Director /s/ JAMES W. BAGLEY
--------------------------------
James W. Bagley
/s/ GEORGE B. FARNSWORTH Vice Chairman, Chief Operating Officer
- --------------------------------- and Director
George B. Farnsworth
Director
/s/ DAN MAYDAN
/s/ PHILIP V. GERDINE ---------------------------------
- --------------------------------- Dan Maydan
Philip V. Gerdine President and Director
Director
/s/ TSUYOSHI KAWANISHI /s/ GERALD F. TAYLOR
- --------------------------------- ---------------------------------
Tsuyoshi Kawanishi Gerald F. Taylor
Director Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ PAUL R. LOW
- ---------------------------------
Paul R. Low
Director
/s/ MICHAEL K. O'FARRELL
---------------------------------
/s/ ALFRED J. STEIN Michael K. O'Farrell
- --------------------------------- Corporate Controller
Alfred J. Stein (Principal Accounting Officer)
</TABLE>
<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
HARRIS TRUST COMPANY OF CALIFORNIA
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 94-0304530
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A NATIONAL BANK) IDENTIFICATION NO.)
</TABLE>
601 SOUTH FIGUEROA STREET, 49TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
ESTHER CERVANTES
HARRIS TRUST COMPANY OF CALIFORNIA
601 SOUTH FIGUEROA STREET, 49TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(213) 239-0675
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
APPLIED MATERIALS, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-1655526
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
3050 BOWERS AVENUE
SANTA CLARA, CALIFORNIA 95054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 727-5555
------------------------
SENIOR DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervisory authority to which it
is subject.
<TABLE>
<S> <C>
State Banking Department Federal Reserve Bank of San Francisco
111 Pine Street 101 Market Street
Suite 1100 San Francisco, California 94105
San Francisco, California 94104
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each affiliation.
None.
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<S> <C>
Exhibit T-1A. A copy of the articles of association of Trustee as presently in effect:
Restated Articles of Incorporation and Amendment of February 9, 1994.
Exhibit T-1A is incorporated herein by reference to S.E.C. File No.
33-54627 of the Registration Statement of FirstFed Financial Corp. Exhibit
T-1A.
Exhibit T-1B. A copy of the certificate of authority of the Trustee to commence
business, if not contained in the articles of association: Certificate of
Authority to commence business.
Exhibits T-1B is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1B.
Exhibit T-1C. A copy of the authorization of the Trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified
in paragraph (1) and (2) above.
Exhibits T-1C is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1C.
Exhibit T-1D. Copy of the existing bylaws of the Trustee or instruments corresponding
thereto: By-Laws of Harris Trust Company of California as of March 30,
1988, as presently in effect.
Exhibits T-1D is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1D.
Exhibit T-1E. A copy of each indenture referred to in Item 4, if obligor is in default.
Not Applicable.
Exhibit T-1F. The consents of United States institutional trustees required by Section
321 of the Act.
Exhibits T-1F is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1F.
Exhibit T-1G. A copy of the latest report of condition of the Trustee published pursuant
to law or the requirement of its supervising or examining authority:
Exhibit T-1G is incorporated herein by reference to S.E.C. File No.
33-59737 of the Registration Statement of Santa Anita Operating Company
Exhibit T-1G.
Exhibit T-1H. A copy of any order pursuant to which the foreign trustee is authorized to
act as sole trustee under the indentures qualified or to be qualified
under the Act.
Not Applicable.
Exhibit T-1I. Foreign trustees are required to file a consent to service of process on
Forms F-X.
Not Applicable.
</TABLE>
1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Harris Trust Company of California, a corporation organized and
existing under the laws of California, has duly caused this Statement of
Eligibility and Qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Los Angeles, State of California,
on June 16, 1995.
HARRIS TRUST COMPANY OF CALIFORNIA
By /s/ ESTHER CERVANTES
Esther Cervantes
Assistant Vice President
2
