<PAGE>
As filed with the Securities and Exchange Commission on April 26, 1996
Registration No. 333-
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- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
SOLECTRON CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 3670 94-2447045
- - -------------------- ---------------------------- ---------------------
(State or other (Primary Standard Industrial (I.R.S.employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or
organization)
777 GIBRALTAR DRIVE
MILPITAS, CALIFORNIA 95035
(408) 957-8500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------------
SUSAN S. WANG
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
SOLECTRON CORPORATION
777 GIBRALTAR DRIVE
MILPITAS, CALIFORNIA 95035
(408) 957-8500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------------
COPIES TO:
STEVEN E. BOCHNER, ESQ.
WILSON, SONSINI, GOODRICH & ROSATI, P.C.
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
-------------------------
CALCULATION OF REGISTRATION FEE
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- - --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount to Offering Aggregate Amount of
Title of Each Class of be Price Per Offering Registration
Securities to be Registered Registered Unit(1) Price (1) Fee
- - --------------------------------------------------------------------------------
7 3/8% Senior Notes due
2006, Series B . . . . . . $150,000,000 100% $150,000,000 $51,725
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(1) Estimated solely for the purpose of calculating the registration fee.
-------------------------
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 THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SOLECTRON CORPORATION
CROSS-REFERENCE SHEET
Pursuant to Rule 404(a) and Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<S> <C>
1. Forepart of the Registration Statement and Outside Front
Cover Page of Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . Facing Page of the RegistrationStatement; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus . . . . . . . . . . Inside Front Cover Page of Prospectus; Available
Information; Incorporation of Certain Documents by
Reference; Outside Back Cover Page of Prospectus
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information. . . Incorporation of Certain Documents by Reference;
Prospectus Summary; Risk Factors; The Company;
Selected Consolidated Financial Data; The Exchange
Offer
4. Terms of the Transaction. . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus Summary; The Exchange Offer;
Description of the New Notes; Description of the
Old Notes; Certain Federal Income Tax
Considerations; Plan of Distribution
5. Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . *
6. Material Contacts with the Company Being Acquired . . . . . . . . . . . . . *
7. Additional Information Required for Reoffering by Persons and Parties
Deemed to Be Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . *
8. Interests of Named Experts and Counsel. . . . . . . . . . . . . . . . . . . Legal Matters; Experts
9. Disclosure of Commission Position on Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
10. Information with Respect to S-3 Registrants . . . . . . . . . . . . . . . . Available Information; Incorporation of Certain
Documents by Reference
11. Incorporation of Certain Information by Reference . . . . . . . . . . . . . Incorporation of Certain Documents by Reference
12. Information with Respect to S-2 or S-3 Registrants. . . . . . . . . . . . . *
13. Incorporation of Certain Information by Reference . . . . . . . . . . . . . *
14. Information with Respect to Registrants Other Than
S-3 or S-2 Registrants. . . . . . . . . . . . . . . . . . . . . . . . . . . *
15. Information with Respect to S-3 Companies . . . . . . . . . . . . . . . . . *
16. Information with Respect to S-2 or S-3 Companies. . . . . . . . . . . . . . *
17. Information with Respect to Companies Other Than
S-3 or S-2 Companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . *
18. Information if Proxies, Consents or Authorizations are to be Solicited. . . *
19. Information if Proxies, Consents or Authorization are not to be Solicited
or in an Exchange Offer. . . . . . . . . . . . . . . . . . . . . . . . . . The Exchange Offer
</TABLE>
- - ------------------------------
* INAPPLICABLE
<PAGE>
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.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 26, 1996
PROSPECTUS
SOLECTRON CORPORATION
OFFER TO EXCHANGE ITS
7 3/8% SENIOR NOTES DUE 2006, SERIES B
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7 3/8% SENIOR NOTES DUE 2006, SERIES A
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1996, UNLESS EXTENDED.
------------------------
Solectron Corporation, a California corporation ("Solectron" or the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus as may be amended or supplemented from time to time
(the "Prospectus") and the accompanying Letter of Transmittal (the "Letter of
Transmittal" and together with this Prospectus, the "Exchange Offer"), to
exchange $1,000 principal amount of its 7 3/8% Senior Notes due 2006, Series B
(the "New Notes") which have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a registration statement (the
"Registration Statement") of which this Prospectus is a part, for each $1,000
principal amount of its outstanding 7 3/8% Senior Notes due 2006, Series A (the
"Old Notes"), of which $150,000,000 aggregate principal amount is outstanding as
of the date hereof.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that (i) the New Notes have been registered under
the Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Notes and will not be entitled to registration
rights or other rights under the Registration Rights Agreement (as defined
below) and (ii) the New Notes will not provide for any increase in the interest
rate thereon pursuant to the Registration Rights Agreement. In that regard, the
Old Notes provide that, if the Exchange Offer is not consummated by August 27,
1996, the interest rate borne by the Old Notes will increase by 0.50% per annum
following August 27, 1996 until the Exchange Offer is consummated. See
"Description of the Old Notes." The New Notes are being offered for exchange in
order to satisfy certain obligations of the Company under the Registration
Rights Agreement, dated as of February 26, 1996 (the "Registration Rights
Agreement"), between the Company and the Initial Purchasers (as defined herein)
of the Old Notes. The New Notes will be issued under the same Indenture (as
defined herein) as the Old Notes. In the event that the Exchange Offer is
consummated, any Old Notes which remain outstanding after consummation of the
Exchange Offer and the New Notes issued in the Exchange Offer will vote together
as a single class for purposes of determining whether holders of the requisite
percentage in outstanding principal amount of Notes (as defined herein) have
taken certain actions or exercised certain rights under the Indenture. The New
Notes and the Old Notes are collectively referred to herein as the "Notes." See
"Description of the New Notes" and "Description of the Old Notes."
CONTINUED ON FOLLOWING PAGE
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL ARE FIRST BEING MAILED TO ALL
HOLDERS OF OLD NOTES ON , 1996.
SEE "RISK FACTORS" ON PAGE 14 FOR INFORMATION THAT SHOULD
BE CONSIDERED IN CONNECTION WITH THIS EXCHANGE OFFER.
---------------------
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.
------------------------
The date of this Prospectus is , 1996.
<PAGE>
Interest on the New Notes is payable semiannually on March 1 and September 1
of each year (each, an "Interest Payment Date"), commencing on the first such
date following the original issuance date of the New Notes. The New Notes will
mature on March 1, 2006. The New Notes are not entitled to any sinking fund and
are not redeemable prior to maturity. The New Notes will constitute unsecured,
unsubordinated indebtedness of the Company and will rank PARI PASSU in right of
payment with all other unsecured and unsubordinated indebtedness of the Company
for borrowed money. Because the Company is a holding company, the New Notes will
be effectively subordinated in right of payment to all existing and future
indebtedness, trade payables, guarantees, lease obligations and letter of credit
obligations of the Company's subsidiaries. See "Capitalization" and "Description
of the New Notes -- Ranking; Holding Company Structure."
The Company is making the Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the Securities and Exchange
Commission (the "Commission") as set forth in certain interpretive letters
addressed to third parties in other transactions. However, the Company has not
sought its own interpretive letter and there can be no assurance that the staff
of the Division of Corporation Finance of the Commission would make a similar
determination with respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the staff of the
Division of Corporation Finance, and subject to the two immediately following
sentences, the Company believes that New Notes issued pursuant to this Exchange
Offer in exchange for Old Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Notes. However, any holder of Old Notes who is an "affiliate" of the
Company or who intends to participate in the Exchange Offer for the purpose of
distributing New Notes, or any broker-dealer who purchased Old Notes from the
Company to resell pursuant to Rule 144A under the Securities Act ("Rule 144A")
or any other available exemption under the Securities Act, (a) will not be able
to rely on the interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in the above-mentioned interpretive letters,
(b) will not be permitted or entitled to tender such Old Notes in the Exchange
Offer and (c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or other transfer
of such Old Notes unless such sale is made pursuant to an exemption from such
requirements. In addition, as described below, if any broker-dealer holds Old
Notes acquired for its own account as a result of market-making or other trading
activities and exchanges such Old Notes for New Notes, then such broker-dealer
must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of such New Notes.
Each holder of Old Notes who wishes to exchange Old Notes for New Notes in
the Exchange Offer will be required to represent that (i) it is not an
"affiliate" of the Company, (ii) any New Notes to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Notes, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Notes for its own
account as a result of market-making activities or other trading activities and
must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Company believes that broker-dealers who acquired Old
Notes for their own accounts, as a result of market-making activities or other
trading activities ("Participating Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New Notes
2
<PAGE>
received upon exchange of such Old Notes (other than Old Notes which represent
an unsold allotment from the original sale of the Old Notes) with a prospectus
meeting the requirements of the Securities Act, which may be the prospectus
prepared for an exchange offer so long as it contains a description of the plan
of distribution with respect to the resale of such New Notes. Accordingly, this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer during the period referred to below in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired by such Participating Broker-Dealer for its own
account as a result of market-making or other trading activities. Subject to
certain provisions set forth in the Registration Rights Agreement, the Company
has agreed that this Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of such New Notes for a period ending 90 days after the Expiration Date referred
to below (subject to extension under certain limited circumstances described
below) or, if earlier, when all such New Notes have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." Any Participating
Broker-Dealer who is an "affiliate" of the Company may not rely on such
interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. See "The Exchange Offer -- Resales of New Notes."
In that regard, each Participating Broker-Dealer who surrenders Old Notes
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Company of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Notes pursuant to this Prospectus until the Company has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Company has given notice that the sale of the New Notes may
be resumed, as the case may be. If the Company gives such notice to suspend the
sale of the New Notes, it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Notes by the number of days during the period
from and including the date of the giving of such notice to and including the
date when Participating Broker-Dealers shall have received copies of the amended
or supplemented Prospectus necessary to permit resales of the New Notes or to
and including the date on which the Company has given notice that the sale of
New Notes may be resumed, as the case may be.
The New Notes will be a new issue of securities for which there currently is
no market. Although the Initial Purchasers have informed the Company that they
each currently intend to make a market in the New Notes, they are not obligated
to do so, and any such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the development or
liquidity of any market for the New Notes. The Company currently does not intend
to apply for listing of the New Notes on any securities exchange or for
quotation through the National Association of Securities Dealers Automated
Quotation System.
Any Old Notes not tendered and accepted in the Exchange Offer will remain
outstanding and will be entitled to all the same rights and will be subject to
the same limitations applicable thereto under the Indenture (except for those
rights which terminate upon consummation of the Exchange Offer). Following
consummation of the Exchange Offer, the holders of Old Notes will continue to be
subject to the existing restrictions upon transfer thereof and the Company will
have no further obligation to such holders (other than to the Initial Purchasers
under certain limited circumstances) to provide for registration under the
Securities Act of the Old Notes held by them. To the extent that Old Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Old Notes could be adversely affected. See "Summary -- Certain
Consequences of a Failure to Exchange Old Notes."
3
<PAGE>
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION. HOLDERS OF OLD NOTES ARE URGED TO READ THIS PROSPECTUS AND THE
RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR
OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
Old Notes may be tendered for exchange on or prior to 5:00 p.m., New York
City time, on , 1996 (such time on such date being hereinafter called
the "Expiration Date"), unless the Exchange Offer is extended by the Company (in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended). Tenders of Old Notes may be withdrawn at
any time on or prior to the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company and to the terms and provisions of
the Registration Rights Agreement. Old Notes may be tendered in whole or in part
in a principal amount of $1,000 and integral multiples thereof. The Company has
agreed to pay all expenses of the Exchange Offer. See "The Exchange Offer --
Fees and Expenses." Each New Note will bear interest from the most recent date
to which interest has been paid or duly provided for on the Old Note surrendered
in exchange for such New Note or, if no such interest has been paid or duly
provided for on such Old Note, from February 29, 1996. Holders of the Old Notes
whose Old Notes are accepted for exchange will not receive accrued interest on
such Old Notes for any period from and after the last Interest Payment Date to
which interest has been paid or duly provided for on such Old Notes prior to the
original issue date of the New Notes or, if no such interest has been paid or
duly provided for, will not receive any accrued interest on such Old Notes, and
will be deemed to have waived the right to receive any interest on such Old
Notes accrued from and after such Interest Payment Date or, if no such interest
has been paid or duly provided for, from and after February 29, 1996.
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. No dealer-manager is being used in connection with this
Exchange Offer. See "Use of Proceeds" and "Plan of Distribution."
4
<PAGE>
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
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the Commission's Regional Offices in New York City (Seven
World Trade Center, 13th Floor, New York, New York 10048), and Chicago (Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661). Copies of
these materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Reports, proxy statements and other information concerning the Company may also
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-4
(together with all amendments thereto, the "Registration Statement") filed by
the Company with the Commission under the Securities Act. This Prospectus, which
forms a part of the Registration Statement, does not contain all the information
set forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission.
Reference is hereby made to the Registration Statement and related exhibits and
schedules filed therewith for further information with respect to the Company
and the New Notes offered hereby. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed or incorporated by
reference as an exhibit to the Registration Statement or otherwise filed by the
Company with the Commission and each such statement is qualified in its entirety
by such reference. The Registration Statement and the exhibits and schedules
thereto may be inspected and copied at the public reference facilities
maintained by the Commission at the addresses described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference: (i) the Company's Proxy Statement for its
Annual Meeting of Shareholders dated December 1, 1995; (ii) the Company's Annual
Report on Form 10-K for the fiscal year ended August 31, 1995; (iii) the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November
30, 1995; (iv) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended February 29, 1996; (v) the Company's Current Report on Form 8-K
dated February 7, 1996; (vi) the Company's Current Report on Form 8-K dated
March 15, 1996; and (vii) the Company's Current Report on Form 8-K dated April
15, 1996.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to
the termination of the Exchange Offer for the New Notes shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
respective dates of filing of such documents. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement or document so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. Subject to the foregoing, all
information appearing in this Prospectus is qualified in its entirety by the
information appearing in the documents incorporated herein by reference.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any and all of the documents
incorporated by reference other than exhibits to such documents which are not
specifically incorporated by reference in such documents. Written or telephone
requests should be directed to Solectron Corporation, Attention: Susan S. Wang,
Senior Vice President, Chief Financial Officer and Secretary, Solectron
Corporation, 777 Gibraltar Drive, Milpitas, California 95035, telephone (408)
957-8500.
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND IS SUBJECT TO,
THE DETAILED INFORMATION, CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO
CONTAINED ELSEWHERE AND INCORPORATED BY REFERENCE IN THIS PROSPECTUS. THIS
PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
FOR A DISCUSSION OF CERTAIN RISK FACTORS IN CONNECTION WITH THIS OFFERING, SEE
"RISK FACTORS." AS USED HEREIN, "SOLECTRON" AND THE "COMPANY" REFER TO SOLECTRON
CORPORATION AND ITS SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES.
THE COMPANY
Solectron Corporation is a leading independent provider of customized,
integrated manufacturing services to original equipment manufacturers ("OEMs")
in the electronics industry. The Company's goal is to offer its customers the
significant competitive advantages of outsourcing their manufacturing, such as
access to advanced manufacturing technologies, shortened product time-to-market,
reduced cost of production and more effective asset utilization. Solectron
provides sophisticated electronic assembly and turnkey manufacturing management
services in the Western and Eastern United States, Europe and Southeast Asia.
The Company's customers include Apple Computer, Applied Materials, Bay Networks,
Cisco Systems, Hewlett-Packard, IBM, Silicon Graphics and Sun Microsystems. The
Company has received numerous superior service and quality awards, including the
Malcolm Baldridge National Quality Award in October 1991, the State of
California Governor's Golden State Award in September 1994, and numerous awards
from customers and vendors.
The Company has experienced substantial growth over the last four fiscal
years, with net sales increasing from $265.4 million in fiscal 1991 to $2.1
billion in fiscal 1995 and net income growing from $9.2 million in fiscal 1991
to $79.5 million in fiscal 1995. Solectron is benefitting from increased
worldwide acceptance of and reliance upon the use of manufacturing specialists
by many electronics OEMs.
Solectron's electronic assembly activities consist primarily of the
placement and attachment of electronic and mechanical components on printed
circuit boards and flexible cables using surface mount technology ("SMT"),
pin-through-hole ("PTH") technology and emerging interconnect technologies. The
Company also assembles higher-level sub-systems and systems incorporating
printed circuit boards and complex electromechanical components, in some cases
manufacturing and packaging products for shipment directly to the customer's
distributors. In addition, Solectron provides other manufacturing services
including refurbishment, disk duplication and packaging services and
remanufacturing. Solectron manufactures on a turnkey basis, with Solectron
directly procuring some or all of the components necessary for production, and
on a consignment basis, where the OEM customer supplies all components for
assembly. The Company also assists its customers in evaluating board designs for
manufacturability.
Solectron's strategy is to establish manufacturing partnerships with major
and emerging OEM leaders in the electronics industry, including manufacturers of
computers, communications equipment, avionics systems and medical
instrumentation. The Company focuses its efforts on customers with which the
opportunity exists to develop long-term business partnerships across a number of
products and through successive product generations. The Company's goal is to
provide its customers with total manufacturing solutions, ranging from the
manufacture of complex, high value-added products to high-volume production of
price-sensitive products.
Solectron has made selective acquisitions to broaden its worldwide
capabilities. The Company acquired facilities in Charlotte, North Carolina and
Bordeaux, France in 1992 from IBM. The Company acquired operations in Everett,
Washington in 1992 and in Boeblingen, Germany in 1995 from Hewlett-Packard and
in Dunfermline, Scotland in 1993 from Philips Electronics. On March 18, 1996,
Solectron purchased Fine Pitch Technology, Inc. located in San Jose, California
to enhance the
6
<PAGE>
Company's ability to provide high complexity, quick-turn prototyping services.
On March 31, 1996, the Company purchased the custom manufacturing services
("CMS") business of Texas Instruments Incorporated ("TI") located in Austin,
Texas and certain fixed assets of TI's CMS business located in Kuala Lumpur,
Malaysia.
Solectron Corporation was incorporated in California in August 1977.
Solectron's executive offices are located at 777 Gibraltar Drive, Milpitas,
California 95035. The Company's telephone number is (408) 957-8500.
THE EXCHANGE OFFER
<TABLE>
<S> <C>
The Exchange Offer......................... Up to $150,000,000 aggregate principal amount of New Notes are
being offered in exchange for a like aggregate principal amount
of Old Notes. Old Notes may be tendered for exchange in whole or
in part in a principal amount of $1,000 and integral multiples
thereof. The Company is making the Exchange Offer in order to
satisfy its obligations under the Registration Rights Agreement
relating to the Old Notes. For a description of the procedures
for tendering Old Notes, see "The Exchange Offer -- Procedures
for Tendering Old Notes."
Expiration Date............................ 5:00 p.m., New York City time, on , 1996 (such time
on such date being hereinafter called the "Expiration Date")
unless the Exchange Offer is extended by the Company (in which
case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended). See "The Exchange
Offer -- Expiration Date; Extensions; Amendments."
Certain Conditions to the Exchange Offer... The Exchange Offer is subject to certain conditions. The Company
reserves the right in its sole and absolute discretion, subject
to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Notes for exchange, (ii) to
terminate the Exchange Offer if certain specified conditions have
not been satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Old Notes tendered pursuant to the
Exchange Offer, subject, however, to the right of holders of Old
Notes to withdraw their tendered Old Notes, or (iv) to waive any
condition or otherwise amend the terms of the Exchange Offer in
any respect. See "The Exchange Offer -- Expiration Date;
Extensions; Amendments" and "-- Certain Conditions to the
Exchange Offer."
Withdrawal Rights.......................... Tenders of Old Notes may be withdrawn at any time on or prior to
the Expiration Date by delivering a written notice of such
withdrawal to
</TABLE>
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the Exchange Agent in conformity with certain procedures set
forth below under "The Exchange Offer -- Withdrawal Rights."
Procedures for Tendering Old Notes......... Tendering holders of Old Notes must complete and sign a Letter of
Transmittal in accordance with the instructions contained therein
and forward the same by mail, facsimile or hand delivery,
together with any other required documents, to the Exchange Agent
(as defined below), either with the Old Notes to be tendered or
in compliance with the specified procedures for guaranteed
delivery of Old Notes. Certain brokers, dealers, commercial
banks, trust companies and other nominees may also effect tenders
by book-entry transfer. Holders of Old Notes registered in the
name of a broker, dealer, commercial bank, trust company or other
nominee are urged to contact such person promptly if they wish to
tender Old Notes pursuant to the Exchange Offer. See "The
Exchange Offer -- Procedures for Tendering Old Notes." Letters of
Transmittal and certificates representing Old Notes should not be
sent to the Company. Such documents should only be sent to the
Exchange Agent. Questions regarding how to tender and requests
for information should be directed to the Exchange Agent. See
"The Exchange Offer -- Exchange Agent."
Resales of New Notes....................... The Company is making the Exchange Offer in reliance on the
position of the staff of the Division of Corporation Finance of
the Commission as set forth in certain interpretive letters
addressed to third parties in other transactions. However, the
Company has not sought its own interpretive letter and there can
be no assurance that the staff of the Division of Corporation
Finance of the Commission would make a similar determination with
respect to the Exchange Offer as it has in such interpretive
letters to third parties. Based on these interpretations by the
staff of the Division of Corporation Finance, and subject to the
two immediately following sentences, the Company believes that
New Notes issued pursuant to this Exchange Offer in exchange for
Old Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than a holder who is a
broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act,
provided that such New Notes are acquired in the ordinary course
of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any
person to
</TABLE>
8
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<S> <C>
participate, in a distribution (within the meaning of the
Securities Act) of such New Notes. However, any holder of Old
Notes who is an "affiliate" of the Company or who intends to
participate in the Exchange Offer for the purpose of distributing
the New Notes, or any broker-dealer who purchased the Old Notes
from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (a) will not be
able to rely on the interpretations of the staff of the Division
of Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be permitted
or entitled to tender such Old Notes in the Exchange Offer and
(c) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or
other transfer of such Old Notes unless such sale is made
pursuant to an exemption from such requirements. In addition, as
described below, if any broker-dealer holds Old Notes acquired
for its own account as a result of market-making or other trading
activities and exchanges such Old Notes for New Notes, then such
broker-dealer must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of such New
Notes.
Each holder of Old Notes who wishes to exchange Old Notes for New
Notes in the Exchange Offer will be required to represent that
(i) it is not an "affiliate" of the Company, (ii) any New Notes
to be received by it are being acquired in the ordinary course of
its business, (iii) it has no arrangement or understanding with
any person to participate in a distribution (withing the meaning
of the Securities Act) of such New Notes, and (iv) if such holder
is not a broker-dealer, such holder is not engaged in, and does
not intend to engage in, a distribution (within the meaning of
the Securities Act) of such New Notes. Each broker-dealer that
receives New Notes for its own account pursuant to the Exchange
Offer must acknowledge that it acquired the Old Notes for its own
account as the result of market-making activities or other
trading activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
Based on the
</TABLE>
9
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<S> <C>
position taken by the staff of the Division of Corporation
Finance of the Commission in the interpretive letters referred to
above, the Company believes that broker-dealers who acquired Old
Notes for their own accounts as a result of market-making
activities or other trading activities ("Participating
Broker-Dealers") may fulfill their prospectus delivery
requirements with respect to the New Notes received upon exchange
of such Old Notes (other than Old Notes which represent an unsold
allotment from the original sale of the Old Notes) with a
prospectus meeting the requirements of the Securities Act which
may be the prospectus prepared for an exchange offer so long as
it contains a description of the plan of distribution with
respect to the resale of such New Notes. Accordingly, this
Prospectus, as it may be amended or supplemented form time to
time, may be used by a Participating Broker-Dealer in connection
with resales of New Notes received in exchange for Old Notes
where such Old Notes were acquired by such Participating
Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set forth
in the Registration Rights Agreement and to the limitations
described below under "The Exchange Offer -- Resale of New
Notes," the Company has agreed that this Prospectus, as it may be
amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with resales of such
New Notes for a period ending 90 days after the Expiration Date
(subject to extension under certain limited circumstances) or, if
earlier, when all such New Notes have been disposed of by such
Participating Broker-Dealer. See "Plan of Distribution." Any
Participating Broker-Dealer who is an "affiliate" of the Company
may not rely on such interpretive letters and must comply with
the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. See
"The Exchange Offer -- Resales of New Notes."
Exchange Agent............................. The exchange agent with respect to the Exchange Offer is State
Street Bank and Trust Company (the "Exchange Agent"). The
addresses, telephone and facsimile numbers of the Exchange Agent
are set forth in "The Exchange Offer -- Exchange Agent" and in
the Letter of Transmittal.
Use of Proceeds............................ The Company will not receive any cash proceeds from the issuance
of the New Notes offered hereby. See "Use of Proceeds."
</TABLE>
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Certain United States Federal Income Tax
Considerations............................ Holders of Old Notes should review the information set forth
under "Certain United States Federal Income Tax Considerations"
prior to tendering Old Notes in the Exchange Offer.
</TABLE>
TERMS OF NEW NOTES
The Exchange Offer applies to up to $150,000,000 aggregate principal amount
of the Company's Old Notes. The New Notes will be obligations of the Company
evidencing the same debt as the Old Notes and will be entitled to the benefits
of the same Indenture. See "Description of New Notes." The form and terms of the
New Notes are the same as the form and terms of the Old Notes in all material
respects except that the New Notes have been registered under the Securities Act
and hence do not include certain rights to registration thereunder and do not
contain transfer restrictions or terms with respect to the special interest
payments applicable to the Old Notes pursuant to the Registration Rights
Agreement. See "Description of the New Notes."
<TABLE>
<S> <C>
New Notes Offered.......................... $150,000,000 aggregate principal amount of 7 3/8% Senior Notes
due 2006, Series B. The New Notes will be issued and the Old
Notes were issued under an Indenture dated as of February 15,
1996 (the "Indenture") between the Company and State Street Bank
and Trust Company, as trustee (the "Trustee"). The New Notes and
any Old Notes which remain outstanding after consummation of the
Exchange Offer will vote together as a single class for purposes
of determining whether holders of the requisite percentage in
outstanding principal amount thereof have taken certain actions
or exercised certain rights under the Indenture. See "Description
of the New Notes -- General."
The terms of the New Notes are identical in all material respects
to the terms of the Old Notes, except that (i) the New Notes have
been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the
Old Notes and will not be entitled to registration rights or
other rights under the Registration Rights Agreement and (ii) the
New Notes will not provide for any increase in the interest rate
thereon pursuant to the Registration Rights Agreement. See "The
Exchange Offer -- Purpose of the Exchange Offer," "Description of
the New Notes," and "Description of the Old Notes."
Maturity Date.............................. March 1, 2006.
Interest Payment Dates..................... Interest will accrue from February 29, 1996, the date of issuance
of the Old Notes, and will be payable semiannually on each March
1 and September 1, commencing September 1, 1996.
</TABLE>
11
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<S> <C>
Interest Adjustment........................ The New Notes will bear interest at the rate of 7 3/8% per annum,
subject to a single permanent increase of 0.25% per annum
depending upon the Initial Rating. "Initial Rating" means the
rating initially assigned to the New Notes by the National
Association of Insurance Commissioners ("NAIC"). The Company has
agreed to use its reasonable efforts to assist in the process of
obtaining the Initial Rating from the NAIC as promptly as
practicable. The rate of interest borne by the New Notes will be
increased by 0.25% if either (a) the Initial Rating is below
NAIC-2 or (b) no Initial Rating has been assigned to the New
Notes by September 1, 1996.
Redemption................................. The New Notes may not be redeemed prior to maturity.
Sinking Fund............................... None.
Ranking.................................... The New Notes will constitute unsecured unsubordinated
indebtedness of the Company and will rank pari passu with all
other unsecured and unsubordinated indebtedness of the Company
for borrowed money. Because the Company is a holding company, the
New Notes will be effectively subordinated to all existing and
future indebtedness, trade payables, guarantees, lease
obligations and letter of credit obligations of the Company's
subsidiaries. As of February 29, 1996, the Company's subsidiaries
had approximately $375 million of outstanding indebtedness and
other obligations (excluding inter-company payables). See
"Capitalization" and "Description of the New Notes -- Ranking;
Holding Company Structure."
Absence of Market for the New Notes........ The New Notes will be a new issue of securities for which there
currently is no market. Although Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and
Hambrecht & Quist LLC, the initial purchasers of the Old Notes
(the "Initial Purchasers"), have informed the Company that they
each currently intend to make a market in the New Notes, they are
not obligated to do so, and any such market making may be
discontinued at any time without notice. Accordingly, there can
be no assurance as to the development or liquidity of any market
for the New Notes. The Company currently does not intend to apply
for listing of the New Notes on any securities exchange or for
quotation through the National Association of Securities Dealers
Automated Quotation System.
</TABLE>
12
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<S> <C>
Use of Proceeds............................ The Company will not receive any proceeds from the Exchange
Offer.
</TABLE>
CERTAIN CONSEQUENCES OF A FAILURE TO EXCHANGE OLD NOTES
The Old Notes have not been registered under the Securities Act or any state
securities laws and therefore may not be offered, sold or otherwise transferred
except in compliance with the registration requirements of the Securities Act
and any other applicable securities laws, or pursuant to an exemption therefrom
or in a transaction not subject thereto, and in each case in compliance with
certain other conditions and restrictions, including the Company's and the
Trustee's right in certain cases to require the delivery of opinions of counsel,
certifications and other information prior to any such transfer. Old Notes which
remain outstanding after consummation of the Exchange Offer will continue to
bear a legend reflecting such restrictions on transfer. In addition, upon
consummation of the Exchange Offer, holders of Old Notes which remain
outstanding will not be entitled to any rights to have such Old Notes registered
under the Securities Act or to any similar rights under the Registration Rights
Agreement (subject to certain limited exceptions applicable solely to the
Initial Purchasers). The Company currently does not intend to register under the
Securities Act any Old Notes which remain outstanding after consummation of the
Exchange Offer (subject to such limited exceptions, if applicable).
To the extent that Old Notes are tendered and accepted in the Exchange Offer
any trading market for Old Notes which remain outstanding after the Exchange
Offer could be adversely affected.
The New Notes and any Old Notes which remain outstanding after consummation
of the Exchange Offer will vote together as a single class for purposes of
determining whether holders of the requisite percentage in outstanding principal
amount thereof have taken certain actions or exercised certain rights under the
Indenture. See "Description of the New Notes -- General."
The Old Notes provide that, if the Exchange Offer is not consummated by
August 27, 1996, the interest rate borne by the Old Notes will increase by 0.50%
per annum following August 27, 1996 until the Exchange Offer is consummated. See
"Description of the Old Notes." Following consummation of the Exchange Offer,
neither the Old Notes nor the New Notes will be entitled to any increase in the
interest rate thereon (other than any increase in interest rate resulting from
the Initial Rating).
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<PAGE>
RISK FACTORS
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THOSE SET FORTH IN THE FOLLOWING RISK FACTORS AND ELSEWHERE IN THIS
PROSPECTUS. IN ADDITION TO THE OTHER INFORMATION CONTAINED AND INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED
CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE TENDERING THEIR OLD
NOTES IN EXCHANGE FOR THE NEW NOTES OFFERED HEREBY.
CUSTOMER CONCENTRATION; DEPENDENCE ON THE ELECTRONICS INDUSTRY
A small number of customers are currently responsible for a significant
portion of the Company's net sales. In each of the three and six months ended
February 29, 1996 and the fiscal years 1995, 1994 and 1993, the Company's ten
largest customers accounted for over 65% of consolidated net sales. The Company
is dependent upon continued revenues from its top ten customers. Any material
delay, cancellation or reduction of orders from these or other customers could
have a materially adverse effect on the Company's results of operations. The
Company's largest customer during the first half of fiscal 1996, Hewlett-Packard
Corporation, accounted for 11% of consolidated net sales, compared to less than
10% in the first half of fiscal 1995. For the six months ended February 28,
1995, International Business Machines ("IBM") represented the Company's largest
customer with sales accounting for 23% of consolidated net sales. For the six
months ended February 29, 1996, sales to IBM were less than 10% of consolidated
net sales. The Company had a manufacturing services agreement with IBM at its
Bordeaux, France facility that expired on December 31, 1995. There can be no
assurance that the Company will continue to do business with IBM.
The percentage of the Company's sales to its major customers may fluctuate
from period to period. Significant reductions in sales to any of these customers
would have a materially adverse effect on the Company's results of operations.
The Company has no firm long-term volume purchase commitments from its
customers, and over the past few years has experienced reduced lead-times in
customer orders. In addition, customer contracts can be canceled and volume
levels can be changed or delayed. The timely replacement of canceled, delayed or
reduced contracts with new business cannot be assured. These risks are
exacerbated because a majority of the Company's sales are to customers in the
electronics industry, which is subject to rapid technological change and product
obsolescence. The factors affecting the electronics industry in general, or any
of the Company's major customers in particular, could have a materially adverse
effect on the Company's results of operations.
MANAGEMENT OF GROWTH; GEOGRAPHIC EXPANSION
The Company has experienced substantial growth over the last four fiscal
years, with net sales increasing from $265.4 million in fiscal 1991 to $2.1
billion in fiscal 1995. In recent years, the Company has acquired facilities in
seven locations, including the Company's recent purchase of the custom
manufacturing services ("CMS") business of Texas Instruments Incorporated ("TI")
located in Austin, Texas. There can be no assurance that the Company's
historical revenue growth will continue or that the Company will successfully
manage the integration of the CMS business or any other businesses it may
acquire in the future. As the Company manages its existing operations and
expands geographically, it may experience certain inefficiencies as it
integrates new operations and manages geographically dispersed operations. In
addition, the Company's results of operations could be adversely affected if its
new facilities do not achieve growth sufficient to offset increased expenditures
associated with geographic expansion. Should the Company increase its
expenditures in anticipation of a future level of sales which does not
materialize, its profitability would be adversely affected. On occasion,
customers may require rapid increases in production which can place an excessive
burden on the Company's resources.
TI TRANSACTION
On March 31, 1996, the Company completed the purchase of the CMS business of
TI located in Austin, Texas and certain assets of TI's CMS business located in
Kuala Lumpur, Malaysia (the "TI
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Transaction"). The TI Transaction entails a number of risks, including
successfully managing the transition of customers from TI to Solectron, managing
the transition at the Austin site from TI to Solectron, integrating purchasing
operations and information systems and managing a larger and more geographically
disparate business. In the TI Transaction, the Company acquired manufacturing
assets and inventory, accounts receivable, assumed associated liabilities, hired
employees and leased space in Austin, Texas, and purchased certain assets from
TI's facility in Kuala Lumpur, Malaysia. Neither TI nor the customers of the CMS
business have guaranteed any future volume of business in the TI Transaction.
The CMS business will increase the Company's expenses and working capital
requirements, and place burdens on the Company's management resources. As a
result, the success of the acquisition is dependent upon the Company's ability
to successfully manage the integration of the CMS operations and retain
customers of the CMS business. In the event the Company is unsuccessful in these
efforts, the Company's results of operations could be materially adversely
affected.
INTERNATIONAL OPERATIONS
Approximately 33% and 38% of the Company's net sales were from operations
outside the United States in the six months ended February 29, 1996 and in
fiscal 1995, respectively. As a result of its foreign sales and facilities, the
Company's operations are subject to risks of doing business abroad, including
but not limited to, fluctuations in the value of currency, export duties,
changes to import and export regulations (including quotas), possible
restrictions on the transfer of funds, employee turnover, labor unrest, longer
payment cycles, greater difficulty in collecting accounts receivable, the
burdens and costs of compliance with a variety of foreign laws and, in certain
parts of the world, political instability. While to date these factors have not
had an adverse impact on the Company's results of operations, there can be no
assurance that there will not be such an impact in the future. In addition, the
Company currently benefits from a tax holiday in its Penang, Malaysia site,
which expires in January 1997, subject to certain extensions. If the tax holiday
is not extended, the Company's effective income tax rate will increase.
AVAILABILITY OF COMPONENTS
A substantial portion of the Company's net sales are derived from turnkey
manufacturing in which the Company provides both materials procurement and
assembly. In turnkey manufacturing, the Company typically bears the risk of
component price increases, which could adversely affect the Company's gross
profit margins. At various times there have been shortages of components in the
electronics industry. In addition, if significant shortages of components should
occur, the Company may be forced to delay manufacturing and shipments, which
would have a materially adverse effect on the Company's results of operations.
POTENTIAL FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results are affected by a number of factors,
including the mix of turnkey and consignment projects, capacity utilization,
price competition, the degree of automation that can be used in the assembly
process, the efficiencies that can be achieved by the Company in managing
inventories and fixed assets, the timing of orders from major customers,
fluctuations in demand for customer products, the timing of expenditures in
anticipation of increased sales, customer product delivery requirements and
increased costs and shortages of components or labor. The Company's turnkey
manufacturing, which typically results in higher net sales and gross profits but
lower gross profit margins than assembly and testing services, represents a
substantial percentage of net sales. All of these factors can cause fluctuations
in the Company's operating results.
COMPETITION
The electronics assembly and manufacturing industry is comprised of a large
number of companies, several of which have achieved substantial market share.
The Company also faces competition from current and prospective customers which
evaluate Solectron's capabilities against the merits of manufacturing products
internally. Solectron competes with different companies depending on the type of
service or geographic area. Certain of the Company's competitors have broader
geographic
15
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breadth. They also may have greater manufacturing, financial, research and
development and marketing resources than the Company. The Company believes that
the primary basis of competition in its targeted markets is manufacturing
technology, quality, responsiveness, the provision of value-added services and
price. To be competitive, the Company must provide technologically advanced
manufacturing services, high product quality levels, flexible delivery schedules
and reliable delivery of finished products on a timely and price competitive
basis. The Company currently may be at a competitive disadvantage as to price
when compared to manufacturers with lower cost structures, particularly with
respect to manufacturers with established facilities where labor costs are
lower.
INTELLECTUAL PROPERTY PROTECTION
The Company's ability to compete may be affected by its ability to protect
its proprietary information. The Company obtained a limited number of U.S.
patents in 1995 related to the process and equipment used in its surface mount
technology. The Company believes these patents are valuable. However, there can
be no assurance these patents will provide meaningful protection for the
Company's manufacturing process and equipment innovations.
There can be no assurance that third parties will not assert infringement
claims against the Company or its customers in the future. In the event a third
party does assert an infringement claim, the Company may be required to expend
significant resources to develop a noninfringing manufacturing process or to
obtain licenses to the manufacturing process which is the subject of litigation.
There can be no assurance that the Company would be successful in such
development or that any such licenses would be available on commercially
acceptable terms, if at all. In addition, such litigation could be lengthy and
costly and could have a materially adverse effect on the Company's financial
condition regardless of the outcome of such litigation.
ENVIRONMENTAL COMPLIANCE
The Company is subject to a variety of environmental regulations relating to
the use, storage, discharge and disposal of hazardous chemicals used during its
manufacturing process. Any failure by the Company to comply with present and
future regulations could subject it to future liabilities or the suspension of
production. In addition, such regulations could restrict the Company's ability
to expand its facilities or could require the Company to acquire costly
equipment or to incur other significant expenses to comply with environmental
regulations.
DEPENDENCE ON KEY PERSONNEL AND SKILLED EMPLOYEES
The Company's continued success depends to a large extent upon the efforts
and abilities of key managerial and technical employees. The loss of services of
certain key personnel could have a materially adverse effect on the Company. The
Company's business also depends upon its ability to continue to attract and
retain senior managers and skilled employees. Failure to do so could adversely
affect the Company's operations.
HOLDING COMPANY STRUCTURE
The Company is a holding company and, accordingly, substantially all of its
operations are conducted through its subsidiaries. The cash flow and consequent
ability of the Company to service debt, including the Old Notes and the New
Notes, is dependent upon the earnings from the business conducted by the Company
through its subsidiaries and the distribution of those earnings, or upon loans
or other payments of funds, by those subsidiaries to the Company. The
subsidiaries have no obligation to pay any amounts due pursuant to the Old Notes
and the New Notes (which are obligations exclusively of the Company), and their
payment of dividends or distributions and making of loans or other payments to
the Company could be subject to statutory or contractual restrictions, are
contingent upon the subsidiaries' earnings and are subject to various business
considerations. The Old Notes are, and the New Notes will be, effectively
subordinated to all existing and future indebtedness, trade payables,
guarantees, lease obligations, letter of credit obligations and other
obligations of
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the Company's subsidiaries. As of February 29, 1996, the Company's subsidiaries
had approximately $375 million of outstanding indebtedness and other obligations
(excluding inter-company payables). See "Description of the New Notes --
Ranking; Holding Company Structure."
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The New Notes are being offered to the holders of the Old Notes. Prior to
this Exchange Offer, there has been no public market for the Old Notes or the
New Notes. The Company does not intend to apply for listing of the New Notes on
any securities exchange or for quotation through the National Association of
Securities Dealers Automated Quotation System. The Initial Purchasers have
informed the Company that they currently intend to make a market in the New
Notes. However, the Initial Purchasers are not obligated to do so and any such
market making may be discontinued at any time without notice. Therefore, no
assurance can be given as to whether an active trading market will develop or be
maintained for the New Notes. If the New Notes are traded after their initial
issuance they may trade at a discount from their initial offering price,
depending on prevailing interest rates, the market for similar securities and
other factors, including the financial condition, performance and prospects of
the Company. If any Old Notes are accepted in the Exchange Offer, any trading
market for Old Notes which remain outstanding after the Exchange Offer could be
adversely affected.
CONSEQUENCES TO NON-TENDERING HOLDERS OF OLD NOTES
Upon consummation of the Exchange Offer, the Company will have no further
obligation to register the Old Notes (subject to certain limited exceptions
applicable solely to the Initial Purchasers). The Company does not currently
intend to register under the Securities Act any Old Notes which remain
outstanding after consummation of the Exchange Offer (subject to limited
exceptions, if applicable). Thereafter, any holder of Old Notes who does not
tender its Old Notes in the Exchange Offer will continue to hold restricted
securities which may not be offered, sold or otherwise transferred, pledged or
hypothecated except pursuant to Rule 144, Rule 144A and Regulation S under the
Securities Act or pursuant to any other exemption from registration under the
Securities Act relating to the disposition of securities, provided that an
opinion of counsel is furnished to the Company that such an exemption is
available. See "Summary -- Certain Consequences of a Failure to Exchange Old
Notes."
USE OF PROCEEDS
This Exchange Offer is intended to satisfy certain of the Company's
obligations under the Registration Rights Agreement. Solectron will not receive
any cash proceeds from the issuance of the New Notes offered in the Exchange
Offer. In consideration for issuing the New Notes as contemplated in this
Prospectus, the Company will receive in exchange Old Notes in like principal
amount, the form and terms of which are the same in all material respects as the
form and terms of the New Notes except that the New Notes have been registered
under the Securities Act and hence do not include certain restrictions on
transfer and rights to registration thereunder and do not provide for any
increase in the interest rate thereon pursuant to the Registration Rights
Agreement. The Old Notes surrendered in exchange for New Notes will be retired
and canceled and cannot be reissued. Accordingly, issuance of the New Notes will
not result in any increase in the indebtedness of the Company.
The net proceeds from the sale of the Old Notes (after the deduction of
placement fees and other expenses of the offering of the Old Notes) were
approximately $148.6 million. Such proceeds will be used for general corporate
purposes, including to provide for higher levels of working capital required to
support revenue growth and to finance capital expenditures associated with the
Company's continued expansion.
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CAPITALIZATION
The following table sets forth the Company's consolidated capitalization as
of February 29, 1996, as adjusted to give effect to the issuance and sale by the
Company of the Old Notes that occurred after the close of the Company's fiscal
quarter ended February 29, 1996. The Company will not receive any cash proceeds
from the issuance of the New Notes offered in the Exchange Offer.
<TABLE>
<CAPTION>
ACTUAL AS ADJUSTED
----------- -------------
(IN THOUSANDS,
EXCEPT SHARE DATA)
<S> <C> <C>
Short-term debt, including current portion of long-term debt and capital lease
obligations.......................................................................... $ 3,757 $ 3,757
----------- -------------
----------- -------------
Long-term liabilities:
7 3/8% Senior Notes due 2006, Series A.............................................. $ -- $ 150,000
6% Convertible Subordinated Notes due 2006.......................................... 230,000 230,000
Zero-coupon convertible subordinated notes due 2012................................. 26,102 26,102
Other long-term liabilities......................................................... 10,171 10,171
----------- -------------
Total long-term liabilities....................................................... 266,273 416,273
----------- -------------
Shareholders' equity:
Preferred stock, 1,200,000 shares authorized; none issued and outstanding........... -- --
Common stock, 80,000,000 shares authorized; 50,332,767 shares issued and outstanding
(1)................................................................................ 341,010 341,010
Retained earnings................................................................... 261,318 261,318
Cumulative translation adjustment................................................... 2,060 2,060
----------- -------------
Total shareholders' equity........................................................ 604,388 604,388
----------- -------------
Total Capitalization.............................................................. $ 870,661 $ 1,020,661
----------- -------------
----------- -------------
</TABLE>
- - ------------------------
(1) Outstanding Common Stock as of February 29, 1996 does not include (i)
6,641,774 shares of Common Stock available for issuance pursuant to the
Company's incentive stock option plans, of which 4,482,080 shares were
subject to outstanding options, (ii) 1,471,856 shares of Common Stock
available for issuance pursuant to the Company's employee stock purchase
plan, (iii) 1,658,224 shares of Common Stock reserved for issuance pursuant
to the zero-coupon convertible subordinated notes due 2012 and (iv)
3,401,864 shares of Common Stock reserved for issuance upon conversion of
the notes offered pursuant to the 6% Convertible Subordinated Notes due
2006.
18
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Notes, the Company entered into the
Registration Rights Agreement with the Initial Purchasers, pursuant to which the
Company agreed to use its reasonable efforts to file with the Commission a
registration statement with respect to the exchange of the Old Notes for debt
securities with terms identical in all material respects to the terms of the Old
Notes, except that (i) the New Notes have been registered under the Securities
Act and therefore will not be subject to certain restrictions on transfer
applicable to the Old Notes and will not be entitled to registration and other
rights under the Registration Rights Agreement and (ii) the New Notes will not
provide for any increase in the interest rate thereon pursuant to the
Registration Rights Agreement. In that regard, the Old Notes provide, among
other things, that, if the Exchange Offer is not consummated by August 27, 1996,
the interest rate borne by the Old Notes following August 27, 1996 will increase
by 0.50% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Old Notes will not be entitled to any increase in
the rate of interest thereon (other than any increase in interest rate resulting
from the Initial Rating) or any further registration rights under the
Registration Rights Agreement, except that the Initial Purchasers may have
certain registration rights under limited circumstances. See "Summary -- Certain
Consequences of a Failure to Exchange Old Notes" and "Description of the Old
Notes."
The Exchange Offer is not being made to, nor will the Company accept tenders
for exchange from, holders of Old Notes in any jurisdiction in which the
Exchange Offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.
TERMS OF THE EXCHANGE OFFER
The Company hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $150,000,000 aggregate principal amount of New Notes for a like
aggregate principal amount of Old Notes properly tendered on or prior to the
Expiration Date (as defined below) and not properly withdrawn in accordance with
the procedures described below. The Company will issue, promptly after the
Expiration Date, an aggregate principal amount of up to $150,000,000 of New
Notes in exchange for a like principal amount of outstanding Old Notes tendered
and accepted in connection with the Exchange Offer. Holders may tender their Old
Notes in whole or in part in a principal amount of $1,000 and integral multiples
thereof.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered. As of the date of this Prospectus, $150,000,000 aggregate
principal amount of Old Notes is outstanding.
Holders of Old Notes do not have any appraisal or dissenters' rights in
connection with the Exchange Offer. Old Notes which are not tendered for
exchange, are tendered but validly withdrawn or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Indenture, but will not be entitled to any further
registration rights under the Registration Rights Agreement, except that the
Initial Purchasers may have certain registration rights under limited
circumstances.
Certificates for any tendered Old Notes that are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise will be returned, without expense, to the tendering holder
thereof promptly after the Expiration Date.
Holders who tender Old Notes in connection with the Exchange Offer will not
be required to pay brokerage commissions or fees or, subject to the instructions
in the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes in connection with the Exchange Offer. The Company will pay all charges
and expenses, other than certain applicable taxes described below, in connection
with the Exchange Offer. See "-- Fees and Expenses."
19
<PAGE>
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR THE COMPANY MAKES ANY
RECOMMENDATION TO HOLDERS OF OLD NOTES AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ALL OR ANY PORTION OF THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS
OF OLD NOTES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT TO THE
EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD NOTES TO TENDER AFTER
READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND CONSULTING WITH THEIR
ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City time, on
, 1996 unless the Exchange Offer is extended by the Company (in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended).
The Company expressly reserves the right in its sole and absolute
discretion, subject to applicable law, at any time and from time to time, (i) to
delay the acceptance of the Old Notes for exchange, (ii) to terminate the
Exchange Offer (whether or not any Old Notes have theretofore been accepted for
exchange) if the Company determines, in its sole and absolute discretion, that
any of the events or conditions referred to under "-- Certain Conditions to the
Exchange Offer" have occurred or exist or have not been satisfied, (iii) to
extend the Expiration Date of the Exchange Offer and retain all Old Notes
tendered pursuant to the Exchange Offer, subject, however, to the right of
holders of Old Notes to withdraw their tendered Old Notes as described under "--
Withdrawal Rights," and (iv) to waive any condition or otherwise amend the terms
of the Exchange Offer in any respect. If the Exchange Offer is amended in a
manner determined by the Company to constitute a material change, or if the
Company waives a material condition of the Exchange Offer, the Company will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders of the Old Notes, and the Company will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company may choose to make any public announcement and
subject to applicable law, the Company shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
issuing a release to the Dow Jones News Service.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE OF NEW NOTES
Upon the terms and subject to the conditions of the Exchange Offer, the
Company will exchange, and will issue to the Exchange Agent, New Notes for Old
Notes validly tendered and not withdrawn (pursuant to the withdrawal rights
described under "-- Withdrawal Rights") promptly after the Expiration Date.
In all cases, delivery of New Notes in exchange for Old Notes tendered and
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of (i) Old Notes or a book-entry
confirmation of a book-entry transfer of Old Notes into the Exchange Agent's
account at The Depository Trust Company ("DTC"), (ii) the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and (iii) any other documents required by the Letter of
Transmittal.
The term "book-entry confirmation" means a timely confirmation of a
book-entry transfer of Old Notes into the Exchange Agent's account at DTC.
Subject to the terms and conditions of the Exchange Offer, the Company will
be deemed to have accepted for exchange, and thereby exchanged, Old Notes
validly tendered and not withdrawn as, if
20
<PAGE>
and when the Company gives oral or written notice to the Exchange Agent of the
Company's acceptance of such Old Notes for exchange pursuant to the Exchange
Offer. The Exchange Agent will act as agent for the Company for the purpose of
receiving tenders of Old Notes, Letters of Transmittal and related documents,
and as agent for tendering holders for the purpose of receiving Old Notes,
Letters of Transmittal and related documents and transmitting New Notes to
validly tendering holders. Such exchange will be made promptly after the
Expiration Date. If for any reason whatsoever, acceptance for exchange or the
exchange of any Old Notes tendered pursuant to the Exchange Offer is delayed
(whether before or after the Company's acceptance for exchange of Old Notes) or
the Company extends the Exchange Offer or is unable to accept for exchange or
exchange Old Notes tendered pursuant to the Exchange Offer, then, without
prejudice to the Company's rights set forth herein, the Exchange Agent may,
nevertheless, on behalf of the Company and subject to Rule 14e-1(c) under the
Exchange Act, retain tendered Old Notes and such Old Notes may not be withdrawn
except to the extent tendering holders are entitled to withdrawal rights as
described under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Old Notes will warrant
and agree in the Letter of Transmittal that it has full power and authority to
tender, exchange, sell, assign and transfer Old Notes, that the Company will
acquire good, marketable and unencumbered title to the tendered Old Notes, free
and clear of all liens, restrictions, charges and encumbrances, and the Old
Notes tendered for exchange are not subject to any adverse claims or proxies.
The holder also will warrant and agree that it will, upon request, execute and
deliver any additional documents deemed by the Company or the Exchange Agent to
be necessary or desirable to complete the exchange, sale, assignment, and
transfer of the Old Notes tendered pursuant to the Exchange Offer.
PROCEDURES FOR TENDERING OLD NOTES
VALID TENDER. Except as set forth below, in order for Old Notes to be
validly tendered pursuant to the Exchange Offer, a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, must be received by the
Exchange Agent at one of its addresses set forth under "-- Exchange Agent," and
either (i) tendered Old Notes must be received by the Exchange Agent, or (ii)
such Old Notes must be tendered pursuant to the procedures for book-entry
transfer set forth below and a book-entry confirmation must be received by the
Exchange Agent, in each case on or prior to the Expiration Date, or (iii) the
guaranteed delivery procedures set forth below must be complied with.
If less than all of the Old Notes are tendered, a tendering holder should
fill in the amount of Old Notes being tendered in the appropriate box on the
Letter of Transmittal. The entire amount of Old Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER,
AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Exchange Agent will establish an account with
respect to the Old Notes at DTC for purposes of the Exchange Offer within two
business days after the date of this Prospectus. Any financial institution that
is a participant in DTC's book-entry transfer facility system may make a
book-entry delivery of the Old Notes by causing DTC to transfer such Old Notes
into the Exchange Agent's account at DTC in accordance with DTC's procedures for
transfers. However, although delivery of Old Notes may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
21
<PAGE>
any required signature guarantees and any other required documents, must in any
case be delivered to and received by the Exchange Agent at its address set forth
under "-- Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
SIGNATURE GUARANTEES. Certificates for the Old Notes need not be endorsed
and signature guarantees on the Letter of Transmittal are unnecessary unless (a)
a certificate for the Old Notes is registered in a name other than that of the
person surrendering the certificate or (b) such registered holder completes the
box entitled "Special Issuance Instructions" or "Special Delivery Instructions"
in the Letter of Transmittal. In the case of (a) or (b) above, such certificates
for Old Notes must be duly endorsed or accompanied by a properly executed bond
power, with the endorsement or signature on the bond power and on the Letter of
Transmittal guaranteed by a firm or other entity identified in Rule 17Ad-15
under the Exchange Act as an "eligible guarantor institution," including (as
such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker or dealer or government securities broker or dealer; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange, Inc. Medallion Signature Program or the Stock Exchanges
Medallion Program (an "Eligible Institution"), unless surrendered on behalf of
such Eligible Institution. See Instruction 1 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a holder desires to tender Old Notes pursuant to
the Exchange Offer and the certificates for such Old Notes are not immediately
available or time will not permit all required documents to reach the Exchange
Agent on or before the Expiration Date, or the procedures for book-entry
transfer cannot be completed on a timely basis, such Old Notes may nevertheless
be tendered, provided that all of the following guaranteed delivery procedures
are complied with:
(i) such tenders are made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form accompanying the Letter of Transmittal, is
received by the Exchange Agent, as provided below, on or prior to the
Expiration Date; and
(iii) the certificates (or a book-entry confirmation) representing all
tendered Old Notes, in proper form for transfer, together with a
properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees and any
other documents required by the Letter of Transmittal, are received by
the Exchange Agent within three New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
Notwithstanding any other provision hereof, the delivery of New Notes in
exchange for Old Notes tendered and accepted for exchange pursuant to the
Exchange Offer will in all cases be made only after timely receipt by the
Exchange Agent of Old Notes, or of a book-entry confirmation with respect to
such Old Notes, and a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees and any
other documents required by the Letter of Transmittal. Accordingly, the delivery
of New Notes might not be made to all tendering holders at the same time, and
will depend upon when Old Notes, book-entry confirmations with respect to Old
Notes and other required documents are received by the Exchange Agent.
The Company's acceptance for exchange of Old Notes tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering holder and the Company upon the terms and subject to the
conditions of the Exchange Offer.
22
<PAGE>
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Old Notes will be determined by the Company, in its sole
discretion, whose determination shall be final and binding on all parties. The
Company reserves the absolute right, in its sole and absolute discretion, to
reject any and all tenders determined by it not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to the
Company, be unlawful. The Company also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "-- Certain Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Old Notes of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
The Company's interpretation of the terms and conditions of the Exchange
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding. No tender of Old Notes will be deemed to have been validly
made until all irregularities with respect to such tender have been cured or
waived. Neither the Company, any affiliates or assigns of the Company, the
Exchange Agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for failure
to give any such notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney, or
any other document required by the Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity (except when New
Notes are being issued to replace Old Notes registered in the same name), such
person should so indicate when signing, and unless waived by the Company, proper
evidence satisfactory to the Company, in its sole discretion, of such person's
authority to so act must be submitted.
A beneficial owner of Old Notes that are held by or registered in the name
of a broker, dealer, commercial bank, trust company or other nominee or
custodian is urged to contact such entity promptly if such beneficial holder
wishes to participate in the Exchange Offer.
RESALES OF NEW NOTES
The Company is making the Exchange Offer in reliance on the position of the
staff of the Division of Corporation Finance of the Commission as set forth in
certain interpretive letters addressed to third parties in other transactions.
However, the Company has not sought its own interpretive letter and there can be
no assurance that the staff of the Division of Corporation Finance of the
Commission would make a similar determination with respect to the Exchange Offer
as it has in such interpretive letters to third parties. Based on these
interpretations by the staff of the Division of Corporation Finance, and subject
to the two immediately following sentences, the Company believes that New Notes
issued pursuant to this Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by a holder thereof (other than a
holder who is a broker-dealer) without further compliance with the registration
and prospectus delivery requirements of the Securities Act, provided that such
New Notes are acquired in the ordinary course of such holder's business and that
such holder is not participating, and has no arrangement or understanding with
any person to participate, in a distribution (within the meaning of the
Securities Act) of such New Notes. However, any holder of Old Notes who is an
"affiliate" of the Company or who intends to participate in the Exchange Offer
for the purpose of distributing New Notes, or any broker-dealer who purchased
Old Notes from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act, (a) will not be able to rely on
the interpretations of the staff of the Division of Corporation Finance of the
Commission set forth in the above-mentioned interpretive letters, (b) will not
be permitted or entitled to tender such Old Notes in the Exchange Offer and (c)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Old Notes
unless such sale is made pursuant to an exemption from such requirements. In
addition, as described below, if any broker-dealer holds Old Notes acquired for
its
23
<PAGE>
own account as a result of market-making or other trading activities and
exchanges such Old Notes for New Notes, then such broker-dealer must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of such New Notes.
Each holder of Old Notes who wishes to exchange Old Notes for New Notes in
the Exchange Offer will be required to represent that (i) it is not an
"affiliate" of the Company, (ii) any New Notes to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Notes, and (iv) if such holder is not
a broker-dealer, such holder is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the Securities Act) of such New Notes.
Each broker-dealer that receives New Notes for its own account pursuant to the
Exchange Offer must acknowledge that it acquired the Old Notes for its own
account as the result of market-making activities or other trading activities
and must agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. Based on the position taken by the staff of the
Division of Corporation Finance of the Commission in the interpretive letters
referred to above, the Company believes that broker-dealers who acquired Old
Notes for their own accounts as a result of market-making activities or other
trading activities ("Participating Broker-Dealers") may fulfill their prospectus
delivery requirements with respect to the New Notes received upon exchange of
such Old Notes (other than Old Notes which represent an unsold allotment from
the original sale of the Old Notes) with a prospectus meeting the requirements
of the Securities Act, which may be the prospectus prepared for an exchange
offer so long as it contains a description of the plan of distribution with
respect to the resale of such New Notes. Accordingly, this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer during the period referred to below in connection with resales of
New Notes received in exchange for Old Notes where such Old Notes were acquired
by such Participating Broker-Dealer for its own account as a result of
market-making or other trading activities. Subject to certain provisions set
forth in the Registration Rights Agreement, the Company has agreed that this
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of such New Notes
for a period ending 90 days after the Expiration Date (subject to extension
under certain limited circumstances described below) or, if earlier, when all
such New Notes have been disposed of by such Participating Broker-Dealer. See
"Plan of Distribution." Any Participating Broker-Dealer who is an "affiliate" of
the Company may not rely on such interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
In that regard, each Participating Broker-Dealer who surrenders Old Notes
pursuant to the Exchange Offer will be deemed to have agreed, by execution of
the Letter of Transmittal, that, upon receipt of notice from the Company of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the circumstances under which they were made, not misleading
or of the occurrence of certain other events specified in the Registration
Rights Agreement, such Participating Broker-Dealer will suspend the sale of New
Notes pursuant to this Prospectus until the Company has amended or supplemented
this Prospectus to correct such misstatement or omission and has furnished
copies of the amended or supplemented Prospectus to such Participating
Broker-Dealer or the Company has given notice that the sale of the New Notes may
be resumed, as the case may be. If the Company gives such notice to suspend the
sale of the New Notes, it shall extend the 90-day period referred to above
during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with the resale of New Notes by the number of days during the period
from and including the date of the giving of such notice to and
24
<PAGE>
including the date when Participating Broker-Dealers shall have received copies
of the amended or supplemented Prospectus necessary to permit resales of the New
Notes or to and including the date on which the Company has given notice that
the sale of New Notes may be resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth below under "-- Exchange
Agent" on or prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the Old Notes to be withdrawn, the
aggregate principal amount of Old Notes to be withdrawn, and (if certificates
for such Old Notes have been tendered) the name of the registered holder of the
Old Notes as set forth on the Old Notes, if different from that of the person
who tendered such Old Notes. If Old Notes have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical release of such Old
Notes, the tendering holder must submit the serial numbers shown on the
particular Old Notes to be withdrawn and the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution, except in the case of
Old Notes tendered for the account of an Eligible Institution. If Old Notes have
been tendered pursuant to the procedures for book-entry transfer set forth in
"-- Procedures for Tendering Old Notes," the notice of withdrawal must specify
the name and number of the account at DTC to be credited with the withdrawal of
Old Notes, in which case a notice of withdrawal will be effective if delivered
to the Exchange Agent by written, telegraphic, telex or facsimile transmission.
Withdrawals of tenders of Old Notes may not be rescinded. Old Notes properly
withdrawn will not be deemed validly tendered for purposes of the Exchange
Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described above under "--
Procedures for Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification. Any Old Notes which have been tendered
but which are withdrawn on or prior to the Expiration Date will be returned to
the holder thereof promptly after withdrawal.
INTEREST ON THE NEW NOTES
Each New Note will bear interest at the rate of 7 3/8% per annum from the
most recent date to which interest has been paid or duly provided for on the Old
Note surrendered in exchange for such New Note or, if no interest has been paid
or duly provided for on such Old Note, from February 29, 1996. Interest on the
New Notes will be payable semiannually on March 1 and September 1 of each year,
commencing on the first such date following the original issuance date of the
New Notes.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the New Notes or, if no
such interest has been paid or duly provided for, will not receive any accrued
interest on such Old Notes, and will be deemed to have waived the right to
receive any interest on such Old Notes accrued from and after such Interest
Payment Date or, if no such interest has been paid or duly provided for, from
and after February 29, 1996.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any extension
of the Exchange Offer, the Company will not be required to accept for exchange,
or to exchange, any Old Notes for any
25
<PAGE>
New Notes, and, as described below, may terminate the Exchange Offer (whether or
not any Old Notes have theretofore been accepted for exchange) or may waive any
conditions to or amend the Exchange Offer, if any of the following conditions
have occurred or exists or have not been satisfied:
(a) the Exchange Offer, or the making of any exchange by a holder,
violates any applicable law or any applicable interpretation of the staff of
the Commission;
(b) any action or proceeding shall have been instituted or threatened in
any court or by or before any governmental agency or body with respect to
the Exchange Offer which, in the Company's judgment, would reasonably be
expected to impair the ability of the Company to proceed with the Exchange
Offer;
(c) any law, statute, rule or regulation shall have been adopted or
enacted which, in the Company's judgment, would reasonably be expected to
impair the ability of the Company to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United States
federal or California or New York state authorities which, in the Company's
judgment, would reasonably be expected to impair the ability of the Company
to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the United
States over-the-counter market shall have been suspended by order of the
Commission or any other governmental authority which, in the Company's
judgment, would reasonably be expected to impair the ability of the Company
to proceed with the Exchange Offer; or
(f) a stop order shall have been issued by the Commission or any state
securities authority suspending the effectiveness of the Registration
Statement or proceedings shall have been initiated or, to the knowledge of
the Company, threatened for that purpose.
If the Company determines in its sole and absolute discretion that any of
the foregoing events or conditions has occurred or exists or has not been
satisfied, the Company may, subject to applicable law, terminate the Exchange
Offer (whether or not any Old Notes have theretofore been accepted for exchange)
or may waive any such condition or otherwise amend the terms of the Exchange
Offer in any respect. If such waiver or amendment constitutes a material change
to the Exchange Offer, the Company will promptly disclose such waiver by means
of a Prospectus supplement that will be distributed to the registered holders of
the Old Notes, and the Company will extend the Exchange Offer to the extent
required by Rule 14e-1 under the Exchange Act.
26
<PAGE>
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent as follows:
<TABLE>
<CAPTION>
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
- - -------------------------------------------------------- --------------------------------------------------------
<S> <C>
State Street Bank and Trust Company State Street Bank and Trust Company
2 International Place, 4th Floor 2 International Place, 4th Floor
Boston, MA 02110 Boston, MA 02110
Attention: Corporate Trust Department Attention: Corporate Trust Department
(Solectron Corporation, 7 3/8% Senior Notes due 2006) (Solectron Corporation, 7 3/8% Senior Notes due 2006)
</TABLE>
OR
BY HAND ONLY:
State Street Bank and Trust Company, N.A.
61 Broadway
Concourse Level
Corporate Trust Window
New York, NY 10006
(Solectron Corporation, 7 3/8% Senior Notes due 2006)
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(617) 664-5610 (Massachusetts)
FACSIMILE TRANSMISSIONS:
(617) 664-5635 (Massachusetts)
Delivery to other than one of the above addresses or facsimile numbers will not
constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Old Notes, and in handling or tendering for their
customers.
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith. If, however, New Notes are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Notes tendered, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.
27
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected data presented under the captions "Consolidated Statements of
Income" and "Consolidated Balance Sheet Data" for, and as of the end of, each of
the years in the five year period ended August 31, 1995, are derived from the
consolidated financial statements of the Company audited by KPMG Peat Marwick
LLP, independent certified public accountants. The selected data presented below
for the six month periods ended February 28, 1995 and February 29, 1996 are
derived from the unaudited consolidated financial statements of the Company.
These results are not necessarily indicative of results to be expected for any
future period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED AUGUST 31, FEB. 28, FEB. 29,
------------------------------------------------------- ---------------------
1991 1992 1993 1994 1995 1995 1996
--------- --------- --------- ---------- ---------- --------- ----------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME:
Net sales............................... $ 265,363 $ 406,883 $ 836,326 $1,456,779 $2,065,559 $ 977,944 $1,347,800
Cost of sales........................... 227,452 352,827 737,458 1,310,451 1,863,729 886,132 1,216,093
--------- --------- --------- ---------- ---------- --------- ----------
Gross profit.......................... 37,911 54,056 98,868 146,328 201,830 91,812 131,707
Selling, general and administrative..... 18,265 23,772 41,965 53,816 73,554 32,337 45,421
Research and development................ 1,743 3,131 3,763 4,162 4,842 2,335 3,539
--------- --------- --------- ---------- ---------- --------- ----------
Operating income.................... 17,903 27,153 53,140 88,350 123,434 57,140 82,747
Interest income......................... 718 2,377 6,051 6,484 6,611 3,215 2,571
Interest expense........................ (2,179) (5,386) (10,578) (10,675) (9,551) (5,465) (1,990)
--------- --------- --------- ---------- ---------- --------- ----------
Income before income taxes.......... 16,442 24,144 48,613 84,159 120,494 54,890 83,328
Income tax expense...................... 7,213 9,656 18,013 28,614 40,968 18,662 28,331
--------- --------- --------- ---------- ---------- --------- ----------
Net income.............................. $ 9,229 $ 14,488 $ 30,600 $ 55,545 $ 79,526 $ 36,228 $ 54,997
--------- --------- --------- ---------- ---------- --------- ----------
--------- --------- --------- ---------- ---------- --------- ----------
Net income per share:
Primary............................... $ 0.35 $ 0.44 $ 0.80 $ 1.32 $ 1.82 $ 0.86 $ 1.07
Fully diluted......................... $ 0.35 $ 0.44 $ 0.75 $ 1.18 $ 1.62 $ 0.76 $ 1.03
Weighted average number of shares:
Primary............................... 26,288 33,100 38,132 42,205 43,773 42,237 51,280
Fully diluted......................... 26,632 33,228 47,816 52,033 52,582 51,786 53,730
Other Data:
Ratios of earnings to fixed charges
(1).................................. 3.68x 3.47x 4.01x 6.01x 8.73x 7.44x 17.66x(2)
</TABLE>
<TABLE>
<CAPTION>
AUGUST 31,
----------------------------------------------------- FEBRUARY 29,
1991 1992 1993 1994 1995 1996
--------- --------- --------- --------- --------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital............................... $ 35,313 $ 199,254 $ 265,025 $ 309,203 $ 355,603 $ 618,229
Total assets.................................. 135,117 308,737 603,285 766,395 940,855 1,228,555
Long-term debt and capital lease
obligations.................................. 12,479 130,933 137,011 140,709 30,043 258,131
Shareholders' equity.......................... 47,146 104,245 260,980 330,789 538,141 604,388
</TABLE>
- - ------------------------------
(1) The ratios of earnings to fixed charges were calculated by dividing fixed
charges into the sum of income before income taxes and fixed charges. Fixed
charges consist of interest and the portion of rent which is deemed to be
representative of an interest factor.
(2) The ratio of earnings to fixed charges for the six months ended February 29,
1996 includes the conversion of the Company's zero-coupon convertible
subordinated notes due 2012 (principally in the fourth quarter of fiscal
year 1995), but excludes the Company's issuance of 6% Convertible
Subordinated Notes due 2006 and 7 3/8 Senior Notes due 2006, Series A
completed in February 1996.
28
<PAGE>
DESCRIPTION OF THE NEW NOTES
GENERAL
The Old Notes were issued and the New Notes are to be issued under the
Indenture, dated as of February 15, 1996 (the "Indenture"), between the Company
and State Street Bank and Trust Company, as trustee (the "Trustee"). The
summaries of certain provisions of the Indenture, the Old Notes and the New
Notes set forth below and under "Description of the Old Notes" 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, the Old Notes and the New Notes,
which provisions of the Indenture, the Old Notes and the New Notes are
incorporated herein by reference. Certain capitalized terms used herein are
defined in the Indenture. A copy of the Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part. As used in
this "Description of the New Notes," all references to the "Company" shall mean
Solectron Corporation, excluding, unless the context shall otherwise require,
its subsidiaries.
If the Exchange Offer is consummated, holders of Old Notes who do not
exchange their Old Notes for New Notes will vote together with holders of the
New Notes for all relevant purposes under the Indenture. In that regard, the
Indenture requires that certain actions by the holders thereunder (including
acceleration following an Event of Default) must be taken, and certain rights
must be exercised, by specified minimum percentages of the aggregate principal
amount of such outstanding notes. In determining whether holders of the
requisite percentage in principal amount have given any notice, consent or
waiver or taken any other action permitted under the Indenture, any Old Notes
which remain outstanding after the Exchange Offer will be aggregated with the
New Notes and the holders of such Old Notes and the New Notes will vote together
for all such purposes. Accordingly, all references herein to specified
percentages in aggregate principal amount of the outstanding Notes shall be
deemed to mean, at any time after the Exchange Offer is consummated, such
percentages in aggregate principal amount of the Old Notes and the New Notes
then outstanding.
The New Notes and the Old Notes are sometimes referred to as, collectively,
the "Notes" and, individually, a "Note."
The New Notes will be unsecured and unsubordinated obligations of the
Company and will be limited to an aggregate principal amount of $150,000,000.
The New Notes will bear interest at the rate of 7 3/8% per annum from the date
of original issuance or from the most recent date to which interest has been
paid or duly provided for on the Old Note surrendered in exchange for such New
Note, or, if no interest has been paid or duly provided for on such Old Note,
from February 29, 1996, payable semiannually on March 1 and September 1 of each
year (each, an "Interest Payment Date"), commencing with the first Interest
Payment Date occurring after the date of original issuance of such New Note, to
the person in whose name such New Notes are registered at the close of business
on the February 15 or August 15 next preceding such Interest Payment Date.
Interest on the New Notes will be computed on the basis of a 360-day year of
twelve 30-day months. The New Notes will mature on March 1, 2006. The New Notes
may not be redeemed prior to maturity and will not be subject to any sinking
fund. The interest rate on the Notes is subject to a single permanent increase
of 0.25% depending upon the Initial Rating (as defined). See "-- Interest
Adjustment" below.
The New Notes will not provide for any temporary increase in the interest
rate thereon pursuant to the Registration Rights Agreement in certain events as
described under "Description of the Old Notes." For a discussion of the
circumstances in which the interest rate on the Old Notes may be temporarily
increased, see "Description of the Old Notes."
INTEREST ADJUSTMENT
The interest rate of 7 3/8% per annum borne by the Notes (the "Initial
Rate") is subject to a single permanent increase of 0.25% depending upon the
Initial Rating. "Initial Rating" means the rating initially assigned to the
Notes by the NAIC. The Company has agreed to use its reasonable efforts to
assist in the process of obtaining the Initial Rating from the NAIC as promptly
as practicable. The Initial Rate will be increased (the "Interest Adjustment")
by 0.25% (such increased interest rate the
29
<PAGE>
"Adjusted Rate") if either (a) the Initial Rating is below NAIC-2 or (b) no
Initial Rating has been assigned to the Notes by September 1, 1996. The
effective date of the Interest Adjustment, if any, will be (i) in the event
described in clause (a) above, either (x) the date the Initial Rating is
publicly announced or notice thereof is received by the Company or (y) if such
public announcement or notice occurs between a record date and an interest
payment date, such interest payment date or (ii) in the event described in
clause (b) above, September 1, 1996 (each of the dates described in clause (i)
and (ii) an "Interest Adjustment Date"). If the Initial Rating is NAIC-2 or
better, there will not be any Interest Adjustment, whether as a result of a
change in the NAIC rating assigned to the Notes subsequent to the determination
of the Initial Rating or of any other event. There will not be more than one
Interest Adjustment under any circumstances.
Starting on and after the Interest Adjustment Date, if any, the Old Notes
and the New Notes will bear interest at the Adjusted Rate. If the Interest
Adjustment occurs during an interest payment period, the Old Notes and the New
Notes will bear interest for such interest payment period at a rate per annum
equal to the weighted average of the Initial Rate and the Adjusted Rate,
calculated by multiplying the Initial Rate or the Adjusted Rate, as applicable,
by the number of days such interest rate is in effect during each month of such
interest payment period, determining the sum of such products, and dividing such
sum by the number of days in such interest payment period. All calculations
pursuant to the preceding sentence will be made on the basis of a 360-day year
consisting of twelve 30-day months.
FORM, DENOMINATION AND REGISTRATION
The New Notes will be issued only in fully registered form, without coupons,
in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof.
Principal of and interest on the New Notes will be payable, and New Notes
may be registered for transfer or exchange, at the office or agency maintained
by the Company for that purpose in New York City, provided that, at the option
of the Company, interest may be paid by check mailed to the persons entitled
thereto, and provided further that a holder of New Notes with an aggregate
principal amount equal to or in excess of $5,000,000 will be paid by wire
transfer in immediately available funds at the election of such holder. No
service charge may be made to a holder for any registration of transfer or
exchange of the New Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
In case any New Note shall become mutilated, defaced, destroyed, lost or
stolen, the Company will execute and, upon the Company's request, the Trustee
will authenticate and deliver a New Note, of like tenor and equal principal
amount in exchange and substitution for such New Note (upon surrender and
cancellation thereof) or in lieu of and substitution for such New Note. In case
such New Note is destroyed, lost or stolen, the applicant for a substituted New
Note shall furnish to the Company and the Trustee such security or indemnity as
may be required by them to hold each of them harmless, and, in every case of
destruction, loss or theft of such New Note, the applicant shall also furnish to
the Company or the Trustee satisfactory evidence of the destruction, loss or
theft of such New Note and of the ownership thereof. Upon the issuance of any
substituted New Note, the Company may require the payment by the registered
holder thereof of a sum sufficient to cover fees and expenses connected
therewith.
RANKING; HOLDING COMPANY STRUCTURE
The Old Notes are, and the New Notes will be, unsecured unsubordinated
obligations of the Company and will rank on a parity in right of payment with
all other unsecured and unsubordinated indebtedness of the Company.
The Old Notes are, and the New Notes will be, obligations exclusively of the
Company. The Company is a holding company substantially all of whose
consolidated assets are held by its subsidiaries. Accordingly, the cash flow of
the Company and the consequent ability to service its debt, including the Old
Notes and the New Notes, are dependent upon the earnings of such subsidiaries.
Because the Company is a holding company, the Old Notes are and the New
Notes will be effectively subordinated to all existing and future indebtedness,
trade payables, guarantees, lease
30
<PAGE>
obligations, letter of credit obligations and other obligations of the Company's
subsidiaries. Therefore, the Company's rights and the rights of its creditors,
including the holders of the Notes, to participate in the assets of any
subsidiary upon the latter's liquidation or reorganization will be subject to
the prior claims of such subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the subsidiary,
in which case the claims of the Company would still be effectively subordinate
to any security interest in, or mortgages or other liens on, the assets of such
subsidiary and would be subordinate to any indebtedness of such subsidiary
senior to that held by the Company. As of February 29, 1996, the Company's
subsidiaries had approximately $375 million of outstanding indebtedness and
other obligations (excluding inter-company payables). Although certain debt
instruments to which the Company and its subsidiaries are parties impose
limitations on the incurrence of additional indebtedness, both the Company and
its subsidiaries retain the ability to incur substantial additional indebtedness
and lease and letter of credit obligations.
CERTAIN COVENANTS OF THE COMPANY
The Indenture does not limit the amount of indebtedness or lease obligations
that may be incurred by the Company and its subsidiaries. The Indenture does not
contain provisions which would give holders of the Notes the right to require
the Company to repurchase their Notes in the event of a decline in the credit
rating of the Company's debt securities resulting from a takeover,
recapitalization or similar restructuring. The covenants described below would
not necessarily afford the holders protection in the event of a highly leveraged
transaction involving the Company, such as a leveraged buyout.
LIMITATION ON LIENS. In the Indenture, the Company covenants that, so long
as any Notes remain outstanding, it will not, 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 ("mortgage") upon any Principal Property or upon any shares of stock
or indebtedness for borrowed money or evidenced by a bond, note, debenture or
similar instrument of any Restricted Subsidiary owned by the Company or a
Restricted Subsidiary (whether such Principal Property, 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, or the grant of such mortgage,
that the Notes (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 Notes) 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) mortgages on property, shares of stock or
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 or a Restricted Subsidiary 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 mortgages on property, shares of stock or indebtedness or other assets to
secure any debt incurred prior to, at the time of, or within 180 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 original
issuance of the Old Notes; (e) mortgages on property of a Person existing at the
time such Person 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 Person 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
31
<PAGE>
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) (including successive extensions, renewals and
replacements); provided, however, that mortgages permitted by any of the
foregoing clauses (a) through (f) shall not extend to or cover any other
Principal Property of the Company or any Restricted Subsidiary or any shares of
stock or indebtedness of any such Restricted Subsidiary, other than the
property, including improvements thereto, stock or indebtedness specified in
such clauses.
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 Notes, provided that
after giving effect thereto, the aggregate amount of all debt then outstanding
so secured by mortgages (not including mortgages permitted under any of clauses
(a) through (g) above) plus Attributable Debt (as defined) of the Company and
Restricted Subsidiaries in respect of Sale and Lease-Back Transactions entered
into after the date of original issuance of the Old Notes (other than any Sale
and Lease-Back Transaction permitted under clause (b) of the restrictions
described below under "-- Limitations on Sale and Lease-Back Transactions" and
other than any Sale and Lease-Back Transaction with respect to any Principal
Property as to which the Company or a Restricted Subsidiary would be entitled to
incur indebtedness secured by a mortgage on such Principal Property at least
equal in amount to the Attributable Debt with respect to such Sale and
Lease-Back Transaction under any of clauses (a) through (g) above) does not at
the time such debt is issued, incurred, created, assumed or guaranteed exceed an
amount equal to 10% of the Consolidated Net Tangible Assets of the Company.
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS. In the Indenture, the
Company covenants that, so long as any of the Notes remain outstanding, 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, 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 Notes, pursuant
to the limitation on liens described above; or (b) the Company shall apply an
amount equal to the greater of the net proceeds of such sale, the fair market
value of such property at the time of such sale (as determined in good faith by
the Company) 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 has a scheduled maturity more than 12
months after its creation or (ii) the purchase, construction, improvement or
development of other comparable property.
DEFINITION OF CERTAIN TERMS. "Attributable Debt" with regard to a Sale and
Lease-Back Transaction with respect to any property is defined in the Indenture
to mean, at the time of determination, the lesser of: (a) the fair market 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 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 practicable to
determine such rate, the rate of interest borne by the Notes) compounded semi-
annually. 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.
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<PAGE>
"Consolidated Net Tangible Assets" is defined in the Indenture to 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 (excluding any thereof which are by their terms extendible or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed), and current
maturities of debt that has a scheduled maturity more than 12 months after the
date of its creation and of obligations under capital leases; (b) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangibles (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;
and (c) appropriate adjustments on account of minority interests of other
Persons holding stock of the Company's Subsidiaries, all as set forth on the
most recent consolidated balance sheet of the Company and its subsidiaries and
computed in accordance with generally accepted accounting principles.
"Principal Property" is defined in the Indenture to mean the land,
improvements, buildings and fixtures (to the extent they constitute real
property interests) (including any leasehold interest therein) constituting the
principal corporate office of the Company, any manufacturing plant or any
manufacturing facility (whether now owned or hereafter acquired) which is (a)
owned or leased 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 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 of which the determination is being made of in excess of 1% 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, improvements,
buildings and such fixtures comprising such office, plant or facility, as the
case may be).
"Restricted Subsidiary" is defined in the Indenture to mean any Subsidiary
which owns any Principal Property; provided, however, that the term "Restricted
Subsidiary" shall not include any Subsidiary which is engaged primarily in
financing receivables or which is otherwise engaged primarily in the finance
business including, without limitation thereto, financing the operations of, or
the purchase of products which are products of or incorporate products of, the
Company and/or its Subsidiaries; 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 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.
"Sale and Lease-Back Transaction" is defined in the Indenture to 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, 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.
"Subsidiary" is defined in the Indenture to mean (i) any corporation of
which more than 66 2/3% of the outstanding voting stock is at the time, and (ii)
any partnership of which more than 66 2/3% of the equity capital or profit
interest is at the time, owned, directly or indirectly, by the Company, by one
or more other Subsidiaries or by the Company and one or more 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.
EVENTS OF DEFAULT
Events of Default under the Indenture include: (a) default in the payment of
the principal of the Notes; (b) default in the payment of any installment of
interest on such Notes and continuance of such default for a period of 30 days;
(c) default in the performance of any other covenant in the Indenture
33
<PAGE>
and continuance of such default for a period of 90 days after receipt by the
Company of notice of such default from the Trustee or receipt by the Company and
the Trustee of notice of such default from the holders of at least 25% in
principal amount of Notes then outstanding; (d) acceleration or nonpayment at
maturity of (i) indebtedness for borrowed money of the Company or (ii) any
guarantee of payment by the Company of any obligation of any Person for borrowed
money, in either case in excess of $25 million, which acceleration or
non-payment is not cured, waived, rescinded or annulled, or such indebtedness or
guarantee is not discharged, within 30 days after receipt of comparable written
notice; or (e) certain events of bankruptcy, insolvency or reorganization in
respect of the Company. The Trustee may withhold notice to the holders of Notes
of any default (except in the payment of principal of or interest on such Notes)
if it considers such withholding to be in the interest of holders of the Notes.
The Indenture provides that, if any Event of Default with respect to the
Notes at the time outstanding occurs and is continuing, either the Trustee or
the holders of not less than 25% in principal amount of the outstanding Notes
may, by notice as provided in the Indenture, declare the principal amount of all
the Notes to be due and payable immediately, but upon certain conditions such
declaration may be rescinded and annulled and past defaults (except, unless
theretofore cured, a default in payment of principal of or interest on the Notes
and certain other specified defaults) and be waived by the holders of a majority
in principal amount of the outstanding Notes on behalf of the holders of all the
Notes.
The Indenture provides that no holder of any Note will have 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 Notes have made written request and
offered reasonable indemnity to the Trustee to institute such proceeding as
Trustee, the Trustee has not received from the holders of a majority in
principal amount of the outstanding Notes a direction inconsistent with such
request and the Trustee has failed to institute such proceeding within 60 days.
However, the holder of any Note will have an absolute right to receive payment
of the principal of and interest on such Note on or after the stated maturity
therein and to institute suit for the enforcement of any such payment.
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to the Notes at the time outstanding, give
to the holders of the outstanding Notes notice of such default known to it if
uncured or not waived, provided that, except in the case of default in the
payment of principal of or interest on any Note, the Trustee will be protected
in withholding such notice if the Trustee in good faith determines that the
withholding of such notice is in the interest of the holders of the outstanding
Notes; and, provided further, that such notice will not be given until 90 days
after the occurrence of a default with respect to outstanding Notes in the
performance of a covenant in the Indenture other than for the payment of the
principal of or interest on any Note. The term default with respect to the Notes
for the purpose only of this provision means the happening of any of the Events
of Default specified in the Indenture excluding any grace periods and
irrespective of any notice requirements.
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the holders of outstanding Notes before proceeding to exercise
any right or power under the Indenture at the request of the holders of the
Notes. The Indenture provides that the holders of a majority in principal amount
of outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
other power conferred on the Trustee, provided that the Trustee may decline to
act if such direction is contrary to law or the Indenture.
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate of no default, or specifying any default that exists.
34
<PAGE>
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease all or substantially all of its assets as an entity to
any other person, unless, among other things, (i) the resulting, surviving or
transferee person (if other than the Company) is organized and existing under
the laws of the United States, any state thereof or the District of Columbia and
such person expressly assumes all obligations of the Company under the Notes and
the Indenture and (ii) the Company or such successor Person shall not
immediately thereafter be in default under the Indenture. Upon the assumption of
the Company's obligations by such a person in such circumstances, subject to
certain exceptions, the Company will be discharged from all its obligations
under the Notes and the Indenture.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in principal amount of the
outstanding Notes, to modify the rights of the holders of the Notes under the
Indenture or any supplemental indenture or the terms of the Notes, provided that
no such modification shall, among other things, (i) change the stated maturity
of any Notes or reduce the principal amount thereof, or reduce the rate or
change the time of payment of interest thereon, or change any place where, or
the currency in which, any Notes are payable, or impair the holder's right to
enforce the payment of any Notes, or (ii) reduce the aforesaid percentage of
Notes, the consent of the holders of which is required for any such
modification; without in each such case obtaining the consent of the holder of
each outstanding Note so affected. The Indenture also contains provisions
permitting the Company and the Trustee, without the consent of the holders of
any Notes, to modify the Indenture or any supplemental indenture in order to,
among other things, (a) add to the Events of Default or the covenants of the
Company for the benefit of the holders of Notes, or (b) cure any ambiguity or
correct or supplement any provision therein which may be inconsistent with other
provisions therein, or to make any other provisions with respect to matters or
questions arising under the Indenture, provided that such actions shall not
adversely affect the interests of the holders of the Notes in any material
respect.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Company may elect either (A) to defease and
be discharged from any and all obligations with respect to the Notes (except for
the obligations to register the transfer or exchange of the Notes, to replace
temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office
or agency in respect of the Notes and to hold moneys for payment in trust)
("defeasance"), or (B) to be released from its obligations with respect to the
Notes described above under "-- Certain Covenants of the Company" ("covenant
defeasance"), upon the irrevocable deposit with the Trustee (or other qualifying
trustee), in trust for such purpose, of money, and/or U. S. Government
Obligations (as defined) which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient to pay
the principal of and interest on the Notes on the due dates therefor, whether
upon maturity or otherwise. Such defeasance or covenant defeasance shall only be
effective if, among other things, (i) it shall not result in a breach or
violation of, or constitute a default under, the Indenture or any other
agreement to which the Company or any Restricted Subsidiary is a party or is
bound, and (ii) the Company has delivered to the Trustee an opinion of counsel
(as specified in the Indenture) to the effect that the holders of the Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such defeasance or covenant defeasance, as the case may be, and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred. It shall also be a condition to the effectiveness of such
defeasance (but not covenant defeasance) that no Event of Default or event which
with notice or lapse of time or both would become an Event of Default with
respect to the Notes shall have occurred and been continuing on the date of, or
during the period ending on the 91st day after the date of, such deposit into
trust.
35
<PAGE>
GOVERNING LAW
The Indenture and the Old Notes are, and the New Notes will be, governed by,
and construed in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEE
The Trust Indenture Act of 1939 contains limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases or to realize on certain property received by it in respect of
any such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions with the Company and its subsidiaries from time to time,
provided that if the Trustee acquires any conflicting interest it must eliminate
such conflict upon the occurrence of an Event of Default, or else resign.
State Street Bank and Trust Company, the Trustee under the Indenture, is the
trustee under the indenture for the Company's 6% Convertible Subordinated Notes
due 2006, as well as the paying agent, conversion agent, registrar and custodian
with regard to such notes. An affiliate of the Trustee, Boston Equiserve Limited
Partnership, is the transfer agent for the Company's common stock. The Trustee
or its affiliates may from time to time in the future provide banking and other
services to the Company in the ordinary course of its business.
DESCRIPTION OF THE OLD NOTES
The terms of the Old Notes are identical in all material respects to the New
Notes, except that (i) the Old Notes have not been registered under the
Securities Act, are subject to certain restrictions on transfer and are entitled
to certain registration rights under the Registration Rights Agreement (which
rights will terminate upon consummation of the Exchange Offer, except to the
extent that the Initial Purchasers may have certain registration rights under
limited circumstances) and (ii) the Old Notes provide for an increase in the
interest rate thereon pursuant to the Registration Rights Agreement. In that
regard, the Old Notes provide that, in the event that the Exchange Offer is not
consummated or a shelf registration statement (the "Shelf Registration
Statement") with respect to the resale of the Old Notes is not declared
effective on or prior to August 27, 1996, the interest rate on the Old Notes
will increase by 0.50% per annum following August 27, 1996; provided, however,
that if the Company requests holders of Old Notes to provide certain information
called for by the Registration Rights Agreement for inclusion in any such Shelf
Registration Statement, then Old Notes owned by holders who do not deliver such
information to the Company or who do not provide comments on the Shelf
Registration Statement when required pursuant to the Registration Rights
Agreement will not be entitled to any such increase in the interest rate
pursuant to the Registration Rights Agreement. Upon the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, after August 27, 1996, the interest rate on any Old Notes which
remain outstanding will be reduced, from the date of such consummation or
effectiveness, as the case may be, to 7 3/8% per annum and the Old Notes will
not thereafter be entitled to any increase in the interest rate thereon pursuant
to the Registration Rights Agreement. The New Notes are not entitled to any such
increase in the interest rate thereon (other than any increase in interest rate
resulting from the Initial Rating). Holders of Old Notes should review the
information set forth under "Summary -- Certain Consequences of a Failure to
Exchange Old Notes" and "Description of the New Notes."
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain United States Federal income tax
considerations to holders of the New Notes who are subject to U.S. net income
tax with respect to the New Notes ("U.S. persons") and who will hold the New
Notes as capital assets. There can be no assurance that the U.S. Internal
Revenue Service (the "IRS") will take a similar view of the purchase, ownership
or disposition of the New Notes. This discussion is based upon the provisions of
the Internal Revenue Code of 1986, as amended, and regulations, rulings and
judicial decisions now in effect, all of which are subject to change. It does
not include any description of the tax laws of any state, local or foreign
governments
36
<PAGE>
or any estate or gift tax considerations that may be applicable to the New Notes
or holders thereof, it does not discuss all aspects of U.S. Federal income
taxation that may be relevant to a particular investor in light of his
particular investment circumstances or to certain types of investors subject to
special treatment under the U.S. Federal income tax laws (for example, dealers
in securities or currencies, S corporations, life insurance companies,
tax-exempt organizations, taxpayers subject to the alternative minimum tax and
non-U.S. persons) and also does not discuss the treatment of New Notes held as a
hedge against currency risks or as part of a straddle with other investments or
as part of a "synthetic security" or other integrated investment (including a
"conversion transaction") comprised of a New Note and one or more other
investments, or situations in which the functional currency of the holders is
not the U.S. dollar.
Holders of Old Notes contemplating acceptance of the Exchange Offer should
consult their own tax advisors with respect to their particular circumstances
and with respect to the effects of state, local or foreign tax laws to which
they may be subject.
EXCHANGE OF NOTES
The exchange of Old Notes for New Notes should not be a taxable event to
holders for federal income tax purposes. The exchange of Old Notes for the New
Notes pursuant to the Exchange Offer should not be treated as an "exchange" for
federal income tax purposes because the New Notes should not be considered to
differ materially in kind or extent from the Old Notes. If, however, the
exchange of the Old Notes for the New Notes were treated as an exchange for
federal income tax purposes, such exchange should constitute a recapitalization
for federal income tax purposes. Accordingly, a holder should have the same
adjusted basis and holding period in the New Notes as it had in the Old Notes
immediately before the exchange.
INTEREST ON THE NEW NOTES
A holder of a New Note will be required to report as ordinary interest
income for U.S. Federal income tax purposes interest earned on the New Note in
accordance with the holder's method of tax accounting.
DISPOSITION OF NEW NOTES
A holder's tax basis for a New Note generally will be the holder's purchase
price for the Old Note. Upon the sale, exchange, redemption, retirement or other
disposition of a New Note, a holder will recognize gain or loss equal to the
difference (if any) between the amount realized and the holder's tax basis in
the New Note. Such gain or loss will be long-term capital gain or loss if the
New Note has been held for more than one year and otherwise will be short-term
capital gain or loss (with certain exceptions to the characterization as capital
gain if the New Note was acquired at a market discount).
BACKUP WITHHOLDING
A holder of a New Note may be subject to backup withholding at the rate of
31% with respect to interest paid on the New Note and proceeds from the sale,
exchange, redemption or retirement of the New Note, unless such holder (a) is a
corporation or comes within certain other exempt categories and, when required,
demonstrates that fact or (b) provides a correct taxpayer identification number,
certifies as to no loss of exemption from backup withholding and otherwise
complies with applicable requirements of the backup withholding rules. A holder
of a New Note who does not provide the Company with his correct taxpayer
identification number may be subject to penalties imposed by the IRS.
A holder of a New Note who is not a U.S. person will generally be exempt
from backup withholding and information reporting requirements, but may be
required to comply with certification and identification procedures in order to
obtain an exemption from backup withholding and information reporting.
Any amount paid as backup withholding will be creditable against the
holder's U.S. Federal income tax liability.
37
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account in connection
with the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by Participating
Broker-Dealers during the period referred to below in connection with resales of
New Notes received in exchange for Old Notes if such Old Notes were acquired by
such Participating Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities. The Company has agreed
that this Prospectus, as it may be amended or supplemented from time to time,
may be used by a Participating Broker-Dealer in connection with resales of such
New Notes for a period ending 90 days after the Expiration Date (subject to
extension under certain limited circumstances described herein) or, if earlier,
when all such New Notes have been disposed of by such Participating
Broker-Dealer. See "The Exchange Offer -- Resales of New Notes."
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. New Notes received by broker-dealers for their own
accounts in connection with the Exchange Offer may be sold from time to time in
one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the New Notes or a combination
of such methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated prices. Any
such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account in connection with the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of New Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Notes will be passed upon for
the Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation,
Palo Alto, California.
EXPERTS
The consolidated financial statements and schedule of Solectron Corporation
and subsidiaries as of August 31, 1995 and 1994, and for each of the years in
the three-year period ended August 31, 1995, have been incorporated herein and
in the Registration Statement in reliance upon the report of KPMG Peat Marwick
LLP, independent auditors, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The financial statements of the Custom Manufacturing Services Business of
Texas Instruments Incorporated at December 31, 1995 and for the year then ended
incorporated by reference in this Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference elsewhere herein, and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
38
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN A CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information.......................... 5
Incorporation of Certain Documents by
Reference..................................... 5
Summary........................................ 6
Risk Factors................................... 14
Use of Proceeds................................ 17
Capitalization................................. 18
The Exchange Offer............................. 19
Selected Consolidated Financial Data........... 28
Description of the New Notes................... 29
Description of the Old Notes................... 36
Certain United States Federal Income Tax
Considerations................................ 36
Plan of Distribution........................... 38
Legal Matters.................................. 38
Experts........................................ 38
</TABLE>
$150,000,000
SOLECTRON
CORPORATION
7 3/8% SENIOR NOTES DUE 2006, SERIES B
---------------------
PROSPECTUS
---------------------
, 1996
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 317 of the California Corporations Code 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"). Article IV of Registrant's Articles of Incorporation and Article VIII of
the Registrant's Bylaws provide for indemnification of the directors, officers,
employees and other agents of the Registrant to the maximum extent permitted by
California law. In addition, Registrant has entered into indemnification
agreements with its officers and directors.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits.
--------
Exhibit
Number Description
--------- ----------------------------------------------------------------
4.1 Indenture, dated as of February 15, 1996, between the Registrant
and State Street Bank and Trust Company, as trustee.
4.2 Registration Rights Agreement, dated as of February 26, 1996,
between the Registrant and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and Hambrecht & Quist LLC.
4.3 Form of Security for 7 3/8% Notes due 2006, Series A originally
issued by Solectron Corporation on February 29, 1996 (included
in Exhibit 4.1).
4.4 Form of Security for 7 3/8% Notes due 2006, Series B to be
issued by Solectron Corporation and registered under the
Securities Act of 1933.
5.1 Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation.
12.1 Statement regarding computation of ratio of earnings to fixed
charges.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
23.3 Consent of Counsel (included in Exhibit 5.1).
24.1 Powers of attorney (included on page II-3).
25.1 Statement of eligibility of trustee on Form T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
99.3 Form of Exchange Agent Agreement.
ITEM 22. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes 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
Securities and Exchange Act of 1934, as amended (the "Exchange Act") (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
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.
2. The undersigned Registrant hereby undertakes as follows:
(a) 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;
II-1
<PAGE>
(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.
(b) 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.
(c) 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.
3. 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 foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
4. The undersigned Registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
5. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in this Registration Statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Milpitas,
State of California on April 26, 1996.
SOLECTRON CORPORATION
By: /s/ Susan S. Wang
-------------------------
Susan S. Wang, Senior Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Koichi Nishimura, Ph.D. and Susan S. Wang and
each of them, with full power to act without the other, as his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities (unless revoked in writing), to sign any and all amendments
to the Registrant's Form S-4 Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting to such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might and could do in person,
hereby ratifying and confirming all that such attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- - -------------------------- ------------------------------- ----------------
/s/ Charles A. Dickinson
- - --------------------------- Chairman of the Board April 26. 1996
Charles A. Dickinson
/s/ Koichi Nishimura
- - --------------------------- President and Chief Executive April 26, 1996
Koichi Nishimura, Ph.D. Officer
/s/ Susan S. Wang
- - --------------------------- Senior Vice President and April 26, 1996
Susan S. Wang Chief Financial Officer
/s/ Winston H. Chen
- - --------------------------- Director April 26, 1996
Winston H. Chen, Ph.D.
/s/ Richard A. D'Amore
- - --------------------------- Director April 26, 1996
Richard A. D'Amore
/s/ Heinz Fridrich
- - --------------------------- Director April 26, 1996
Heinz Fridrich
/s/ Kenneth E. Haughton
- - --------------------------- Director April 26, 1996
Kenneth E. Haughton, Ph.D.
/s/ Paul R. Low
- - --------------------------- Director April 26, 1996
Paul R. Low, Ph.D.
/s/ W. Ferrell Sanders
- - --------------------------- Director April 26, 1996
W. Ferrell Sanders
/s/ Osamu Yamada
- - --------------------------- Director April 26, 1996
Osamu Yamada
II-3
<PAGE>
SOLECTRON CORPORATION
REGISTRATION STATEMENT ON FORM S-4
----------------------------------
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- - ---------- ------------------------------------------------------------------------------------------ ---------------
<S> <C> <C>
4.1 Indenture, dated as of February 15, 1996, between the Registrant and State Street Bank
and Trust Company, as trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2 Registration Rights Agreement, dated as of February 26, 1996, between the Registrant
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and Hambrecht & Quist LLC. . . . . . . . . . . . . . . . . . .
4.3 Form of Security for 7 3/8% Notes due 2006, Series A originally issued by Solectron
Corporation on February 29, 1996 (included in Exhibit 4.1). . . . . . . . . . . . . . . .
4.4 Form of Security for 7 3/8% Notes due 2006, Series B to be issued by Solectron
Corporation and registered under the Securities Act of 1933 . . . . . . . . . . . . . . .
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation . . . . . . . . . .
12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges . . . . . . . . . .
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors. . . . . . . . . . . . . . . . . .
23.2 Consent of Ernst & Young LLP, Independent Auditors. . . . . . . . . . . . . . . . . . . .
23.3 Consent of Counsel (contained in Exhibit 5.1 above) . . . . . . . . . . . . . . . . . . .
25.1 Statement of eligibility of trustee on Form T-1 . . . . . . . . . . . . . . . . . . . . .
99.1 Form of Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99.2 Form of Notice of Guaranteed Delivery . . . . . . . . . . . . . . . . . . . . . . . . . .
99.3 Form of Exchange Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
<PAGE>
- - --------------------------------------------------------------------------------
EXHIBIT 4.1
SOLECTRON CORPORATION
TO
STATE STREET BANK AND TRUST COMPANY
Trustee
INDENTURE
Dated as of February 15, 1996
7 3/8% Senior Notes due 2006
- - --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Additonal Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Attributable Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Cedel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Net Tangible Assets . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
covenant defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Euroclear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Foreign Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Initial Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Initial Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Initial Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Adjustment Date . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issue Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
NAIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Note or Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Noteholder or holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Note register. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Offering Memorandum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
i
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Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PORTAL Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Principal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
QIB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Registration Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . 6
Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regulation S Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Resale Restriction Termination Date. . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Restricted Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Restricted Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Rule 144A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Rule 144A Global Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Rule 144(k). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sale and Lease-Back Transaction. . . . . . . . . . . . . . . . . . . . . . . 7
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. Government Obligations. . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES. . . . . . . . . . . . . 9
Section 2.1 Designation, Amount and Issue of Notes . . . . . . . . . . . . 9
Section 2.2 Form of Notess . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.3 Date and Denomination of Notes; Payments of Interest . . . . . 10
Section 2.4 Execution of Notes . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.5 Exchange and Registration of Transfer of Notes:
Restrictions on Transfer: Depositary . . . . . . . . . . . . 12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . 20
Section 2.7 Temporary Notes. . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.8 Cancellation of Notes Paid, Etc. . . . . . . . . . . . . . . . 21
ii
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ARTICLE III
REDEMPTION OF NOTES . . . . . . . . . . . . . 21
Section 3.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . 22
Section 4.1 Payment of Principal and Interest. . . . . . . . . . . . . . . 22
Section 4.2 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 22
Section 4.3 Appointments to Fill Vacancies in Trustee's Office . . . . . . 23
Section 4.4 Provisions as to Paying Agent. . . . . . . . . . . . . . . . . 23
Section 4.5 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . 24
Section 4.6 Rule 144A Information Requirement. . . . . . . . . . . . . . . 24
Section 4.7 Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . 24
Section 4.8 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . 25
Section 4.9 Limitations on Sale and Lease-Back Transactions. . . . . . . . 26
Section 4.10 Initial Rating from NAIC . . . . . . . . . . . . . . . . . . . 26
Section 4.11 Compliance Certificate . . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE . . . . . . . . . . . 27
Section 5.1 Noteholders' Lists . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.2 Preservation and Disclosure of Lists . . . . . . . . . . . . . 27
Section 5.3 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.4 Reports by Company . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT. . . . . . . . . . . . . 28
Section 6.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.2 Payments of Notes on Default: Suit Therefor . . . . . . . . . 31
Section 6.3 Application of Monies Collected by Trustee . . . . . . . . . . 32
Section 6.4 Proceedings by Noteholder. . . . . . . . . . . . . . . . . . . 33
Section 6.5 Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . 34
Section 6.6 Remedies Cumulative and Continuing . . . . . . . . . . . . . . 34
Section 6.7 Direction of Proceedings and Waiver of Defaults
by Majority of Noteholders . . . . . . . . . . . . . . . . . 34
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Section 6.8 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 35
Section 6.9 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII
CONCERNING THE TRUSTEE. . . . . . . . . . . . . 36
Section 7.1 Duties and Responsibilities of Trustee . . . . . . . . . . . . 36
Section 7.2 Reliance on Documents, Opinions, Etc. . . . . . . . . . . . . 37
Section 7.3 No Responsibility for Recitals, Etc. . . . . . . . . . . . . . 38
Section 7.4 Trustee, Paying Agents or Registrat May Own Notes. . . . . . . 38
Section 7.5 Monies to Be Held in Trust . . . . . . . . . . . . . . . . . . 38
Section 7.6 Compensation and Expenses of Trustee . . . . . . . . . . . . . 38
Section 7.7 Officers' Certificate as Evidence. . . . . . . . . . . . . . . 39
Section 7.8 Conflicting Interests of Trustee . . . . . . . . . . . . . . . 39
Section 7.9 Eligibility of Trustee . . . . . . . . . . . . . . . . . . . . 39
Section 7.10 Resignation or Removal of Trustee. . . . . . . . . . . . . . . 40
Section 7.11 Acceptance by Successor Trustee. . . . . . . . . . . . . . . . 41
Section 7.12 Succession by Merger, Etc. . . . . . . . . . . . . . . . . . . 42
Section 7.13 Limitation on Rights of Trustee as Creditor. . . . . . . . . . 42
ARTICLE VIII
CONCERNING THE NOTEHOLDERS . . . . . . . . . . . 42
Section 8.1 Action by Noteholder . . . . . . . . . . . . . . . . . . . . . 42
Section 8.2 Proof of Execution by Noteholders. . . . . . . . . . . . . . . 43
Section 8.3 Who Are Deemed Absolute Owners . . . . . . . . . . . . . . . . 43
Section 8.4 Company-Owned Notes Disregarded. . . . . . . . . . . . . . . . 43
Section 8.5 Revocation of Consents: Future Holders Bound . . . . . . . . . 44
ARTICLE IX
NOTEHOLDERS' MEETINGS. . . . . . . . . . . . . 44
Section 9.1 Purpose of Meetings. . . . . . . . . . . . . . . . . . . . . . 44
Section 9.2 Call of Meetings by Trustee. . . . . . . . . . . . . . . . . . 45
Section 9.3 Call of Meetings by Company or Noteholders . . . . . . . . . . 45
Section 9.4 Qualifications for Voting. . . . . . . . . . . . . . . . . . . 45
Section 9.5 Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.6 Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.7 No Delay of Rights by Meeting. . . . . . . . . . . . . . . . . 46
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ARTICLE X
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . 47
Section 10.1 Supplemental Indentures Without Consent of Noteholders . . . . 47
Section 10.2 Supplemental Indentures with Consent of Noteholders. . . . . . 48
Section 10.3 Effect of Supplemental Indenture . . . . . . . . . . . . . . . 49
Section 10.4 Notation on Notes. . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.5 Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee. . . . . . . . . . . . . . 49
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE. . . . . . 50
Section 11.1 Company May Consolidate Etc. on Certain Terms. . . . . . . . . 50
Section 11.2 Successor Corporation to Be Substituted. . . . . . . . . . . . 50
Section 11.3 Opinion of Counsel to Be Given Trustee . . . . . . . . . . . . 51
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . 51
Section 12.1 Discharge of Indenture . . . . . . . . . . . . . . . . . . . . 51
Section 12.2 Deposited Monies to Be Held in Trust by Trustee. . . . . . . . 52
Section 12.3 Paying Agent to Repay Monies Held. . . . . . . . . . . . . . . 52
Section 12.4 Return of Unclaimed Monies . . . . . . . . . . . . . . . . . . 52
Section 12.5 Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS. . . . . . . . . . . . . 53
Section 13.1 Indenture and Notes Solely Corporate Obligations . . . . . . . 53
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . 53
Section 14.1 Company's Option to Effect Defeasance or Covenant Defeasance . 53
Section 14.2 Defeasance and Discharge . . . . . . . . . . . . . . . . . . . 53
Section 14.3 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 54
Section 14.4 Conditions to Defeasance or Covenant Defeasance. . . . . . . . 54
Section 14.5 Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions. . . . . 55
v
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ARTICLE XV
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . 56
Section 15.1 Provisions Binding on Company's Successors . . . . . . . . . . 56
Section 15.2 Official Acts by Successor Corporation . . . . . . . . . . . . 56
Section 15.3 Addresses for Notices, Etc.. . . . . . . . . . . . . . . . . . 56
Section 15.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 15.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. . . . . . . . . . . . . . . . . . . 57
Section 15.6 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 15.7 Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . 58
Section 15.8 No Security Interest Created . . . . . . . . . . . . . . . . . 58
Section 15.9 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . 58
Section 15.10 Table of Contents, Headings, Etc.. . . . . . . . . . . . . . . 58
Section 15.11 Authenticating Agent . . . . . . . . . . . . . . . . . . . . . 58
Section 15.12 Execution in Counterparts. . . . . . . . . . . . . . . . . . . 59
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<PAGE>
INDENTURE dated as of February 15, 1996, between Solectron Corporation, a
California corporation (hereinafter sometimes called the "Company", as more
fully set forth in Section 1.1), and State Street Bank and Trust Company, a
Massachusetts trust company duly organized and existing under the laws of the
State of Massachusetts, as trustee hereunder (hereinafter sometimes called the
"Trustee", as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 7 3/8% Series A Senior Notes due 2006 (the "Series A Notes")
and its 7 3/8% Series B Senior Notes due 2006 (the "Series B Notes" and,
together with the Series A Notes, the "Notes"), in an aggregate principal amount
not to exceed $150,000,000 and, to provide the terms and conditions upon which
the Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment and a certificate of transfer to be borne by the
Notes are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in
<PAGE>
force at the date of the execution of this Indenture. The words "herein,"
"hereof," "hereunder," and words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other Subdivision. The
terms defined in this Article include the plural as well as the singular.
ADDITIONAL INTEREST: The term "Additional Interest" shall have the meaning
specified in Exhibit A.
AFFILIATE: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
ATTRIBUTABLE DEBT: The term "Attributable Debt" shall mean, with regard to
a Sale and Lease-Back Transaction with respect to any property, at the time of
determination, the lesser of: (a) the fair market 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 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 practicable to determine such
rate, the rate of interest borne by the Notes) compounded semi-annually. 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.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board of
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York, San Jose, California or the city in which
the Corporate Trust Office is located are authorized or obligated by law or
executive order to close or be closed.
CEDEL: The term "Cedel" shall mean Cedel, S.A.
COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission.
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<PAGE>
COMPANY: The term "Company" shall mean Solectron Corporation, a California
corporation, and subject to the provisions of Article XI, shall include its
successors and assigns.
CONSOLIDATED NET TANGIBLE ASSETS: 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 (excluding any thereof which are by
their terms extendible or renewable at the option of the obligor thereon to a
time more than 12 months after the time as of which the amount thereof is being
computed), and current maturities of debt that has a scheduled maturity more
than 12 months after the date of its creation and of obligations under capital
leases, (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles (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 and (c) appropriate adjustments on account of
minority interests of other Persons holding stock of the Company's Subsidiaries,
all as set forth on the most recent consolidated balance sheet of the Company
and its subsidiaries and computed in accordance with generally accepted
accounting principles.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or other similar
term, shall mean the principal office of the Trustee at which at any particular
time its corporate trust business shall be principally administered, which
office is, at the date as of which this Indenture is dated, located at 2
International Place, 4th Floor, Boston, Massachusetts 02110, Attention:
Corporate Trust Division (Solectron Corporation, 7 3/8% Senior Notes due 2006).
COVENANT DEFEASANCE: The term "covenant defeasance" shall have the meaning
specified in Section 14.3.
CUSTODIAN: The term "Custodian" shall mean State Street Bank and Trust
Company, as custodian with respect to the Notes in global form, or any successor
entity thereto.
DEFAULT: The term "default" shall mean any event that is, or after notice
or passage of time, or both, would be, an Event of Default.
DEFEASANCE: The term "defeasance" shall have the meaning specified in
Section 14.2.
DEPOSITARY: The term "Depositary" shall mean, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
EUROCLEAR: The term "Euroclear" shall mean the Euroclear System.
-3-
<PAGE>
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 6.1 (a), (b), (c), (d), (e), (f) or (g).
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.
EXCHANGE NOTES: The term "Exchange Notes" shall mean Series B Notes issued
by the Company pursuant to the Exchange Offer.
EXCHANGE OFFER: The term "Exchange Offer" shall mean the offer that may be
made by the Company pursuant to the Registration Rights Agreement to exchange
Series B Notes for Series A Notes.
FOREIGN PERSON: The term "Foreign Person" shall have the meaning specified
in Section 2.5(b).
GLOBAL NOTE: The term "Global Note" shall have the meaning specified in
Section 2.5(d).
INDENTURE: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented, including, for all purposes of this instrument, and any such
supplemental 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.
INITIAL PURCHASERS: The term "Initial Purchasers" shall mean Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated
and Hambrecht & Quist LLC.
INITIAL RATE: The term "Initial Rate" shall mean the interest rate of 7
3/8% borne by the Notes on the original date of issuance of the Series A Notes.
INITIAL RATING: The term "Initial Rating" shall have the meaning specified
in Exhibit A.
INTEREST ADJUSTMENT DATE: The term "Interest Adjustment Date" shall have
the meaning specified in Exhibit A.
ISSUE DATE: The term "Issue Date" shall mean February 29, 1996.
MORTGAGE: The term "mortgage" shall shall have the meaning specified in
Section 4.8.
NAIC: The term "NAIC" shall mean the National Association of Insurance
Commissioners.
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<PAGE>
NOTE or NOTES: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture.
NOTEHOLDER or HOLDER: The terms "Noteholder" or "holder" as applied to any
Note, or other similar terms (but excluding the term "beneficial holder"), shall
mean any person in whose name at the time a particular Note is registered on the
Note registrar's books.
NOTE REGISTER: The term "Note register" shall have the meaning specified
in Section 2.5.
OFFERING MEMORANDUM: The term "Offering Memorandum" means that certain
Offering Memorandum, dated February 26, 1996, of the Company used in connection
with the offering of the Notes.
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when used with
respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer, Executive or Senior Vice President or
any Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) by the Treasurer
or any Assistant Treasurer or Secretary or any Assistant Secretary of the
Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion in
writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee.
OUTSTANDING: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 8.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Notes in exchange for, in lieu of which, or in substitution for
which, other Notes shall have been authenticated and delivered pursuant to
the terms of Section 2.6 unless proof satisfactory to the Trustee is
presented that any such Notes are held by bona fide holders in due course.
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL MARKET: The term "PORTAL Market" shall mean the Private Offerings,
Resales and Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
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PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note shall
mean every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
PRINCIPAL PROPERTY: The term "Principal Property" shall mean the land,
improvements, buildings and fixtures (to the extent they constitute real
property interests) (including any leasehold interest therein) constituting the
principal corporate office of the Company, any manufacturing plant or any
manufacturing facility (whether now owned or hereafter acquired) which is (a)
owned or leased 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 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 of which the determination is being made of in excess of 1% 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, improvements,
buildings and such fixtures comprising such office, plant or facility, as the
case may be).
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.
REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights Agreement"
shall mean that certain Registration Rights Agreement, dated as of February 26,
1996, between the Company and the Initial Purchasers.
REGULATION S: The term "Regulation S" shall mean Regulation S as
promulgated under the Securities Act.
REGULATION S GLOBAL NOTE: The term "Regulation S Global Note" shall have
the meaning specified in Section 2.5(d).
RESALE RESTRICTION TERMINATION DATE: The term "Resale Restriction
Termination Date" shall mean, with respect to any Note, the date which is three
years after the later of the Issue Date and the last date on which the Company
or any Affiliate of the Company was the owner of such Note (or of any
predecessor Note).
RESPONSIBLE OFFICER: The term "Responsible Officer," when used with
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
corporate trust matters.
RESTRICTED NOTES: The term "Restricted Notes" has the meaning specified in
Section 2.5.
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RESTRICTED SUBSIDIARY: The term "Restricted Subsidiary" shall mean any
Subsidiary which owns any Principal Property; provided, however, that the term
"Restricted Subsidiary" shall not include any Subsidiary which is engaged
primarily in financing receivables or which is otherwise engaged primarily in
the finance business including, without limitation thereto, financing the
operations of, or the purchase of products which are products of or incorporate
products of, the Company and/or its Subsidiaries; 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 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.
RULE 144A: The term "Rule 144A" shall mean Rule 144A as promulgated under
the Securities Act.
RULE 144A GLOBAL NOTE: The term "Rule 144A Global Note" shall have the
meaning specified in Section 2.5(d).
RULE 144(K): The term "Rule 144(k)" shall mean Rule 144(k) as promulgated
under the Securities Act.
SALE AND LEASE-BACK TRANSACTION: 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, 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.
SECURITIES ACT: The term "Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
SPECIAL INTEREST: The term "Special Interest" shall have the meaning
specified in Exhibit A.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to any person,
(i) any corporation of which more than 66-2/3% of the outstanding voting stock
is at the time, and (ii) any partnership of which more than 66-2/3% of the
equity capital or profit interest is at the time, owned, directly or indirectly,
by the Company, by one or more other Subsidiaries or by the Company and one or
more 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: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture; except as provided in Section 10.3; PROVIDED, HOWEVER, that
in the event the Trust Indenture Act of 1939
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is amended after the date hereof, the term "Trust Indenture Act" shall mean, to
the extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
TRUSTEE: The term "Trustee" shall mean State Street Bank and Trust Company
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.
U.S. GOVERNMENT OBLIGATIONS: The term "U.S. Government Obligations" shall
mean securities which are (i) direct obligations of the United States of America
for the payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a U.S. bank or trust company 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 interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
The definitions of certain other terms are as specified in Section 2.5 and
in the form of Note attached as Exhibit A hereto.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "7 3/8% Senior Notes due 2006." The Notes shall not exceed the
aggregate principal amount of $150,000,000 (except pursuant to Sections 2.5 and
2.6 hereof) upon the execution of this Indenture, or from time to time
thereafter, may be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by its (a) President,
any Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President") and (b) Treasurer or Assistant Treasurer or its
Secretary or any Assistant Secretary, without any further action by the Company
hereunder.
All Notes which shall be issued and authenticated on the Issue Date shall
be designated as the "7 3/8% Series A Senior Notes due 2006" of the Company.
The Series B Notes shall be
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designated as the "7 3/8% Series B Senior Notes due 2006" of the Company and
shall be identical in all material respects to the Series A Notes (except that
the Series B Notes shall not (a) bear the legend set forth in Section 2.5(d)
manifesting the transfer restrictions, (b) contain certain provisions relating
to Special Interest and (c) bear the legend relating to the Registration Rights
Agreement). The Series B Notes shall be originally issued only in exchange for
the then outstanding Series A Notes tendered at the option of the holders
thereof pursuant to the Exchange Offer or upon transfer of a Series A Note by
the Initial Purchasers in accordance with the Registration Rights Agreement.
Section 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest on any
Note in global form shall be made to the holder of such Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
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The person in whose name any Note (or its Predecessor Note) is registered
at the close of business on any record date with respect to any interest payment
date shall be entitled to receive the interest payable on such interest payment
date notwithstanding the cancellation of such Note upon any transfer or exchange
subsequent to the record date and on or prior to such interest payment date.
Interest may, at the option of the Company, be paid by check mailed to the
address of such person on the Note register; PROVIDED that, with respect to any
holder of Notes with an aggregate principal amount equal to or in excess of
$5,000,000, at the request of such holder in writing to the Company (who shall
then furnish written notice to such effect to the Trustee), interest on such
holder's Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instructions supplied by such holder to the
Trustee and paying agent (if different from the Trustee). The term "record
date" with respect to any interest payment date shall mean the February 15 or
August 15 preceding said March 1 or September 1, respectively.
Any interest, including any Special Interest and/or any Additional
Interest, on any Note which is payable, but is not punctually paid or duly
provided for, on any said March 1 or September 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest to be paid on each Note and the date of the
payment (which shall be not less than twenty-five (25) days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to
an earlier date), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
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 fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment and
not less than ten (10) days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Noteholder at his address as it appears in the
Note register, not less than ten (10) days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Notes (or their
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respective Predecessor Notes) were registered at the close of business on
such special record date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange and automated quotation system on which the Notes may
be listed or designated for issuance and upon such notice as may be
required by such exchange and automated quotation system, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the
Trustee.
Section 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
President, any Executive or Senior Vice President or any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title "Vice President") and attested by the manual or facsimile signature of
its Secretary or any of its Assistant Secretaries (which may be printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such
Notes as shall bear thereon a certificate of authentication substantially in the
form set forth on the form of Note attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 15.11), shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Note executed by the Company shall be
conclusive evidence that the Note so authenticated has been duly authenticated
and delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES:
RESTRICTIONS ON TRANSFER: DEPOSITARY.
(a) The Company shall cause to be kept at the Corporate Trust Office
a register (the register maintained in such office and in any other office
or agency of the Company designated pursuant to Section 4.2 being herein
sometimes collectively referred to as the "Note register") in which,
subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers and exchanges
of Notes. The Note register shall be in written form or in any form
capable of being converted into written form within a reasonably prompt
period of time.
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The Trustee is hereby appointed "Note registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Company
may appoint one or more co-registrars in accordance with Section 4.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for
such transfer set forth in this Section 2.5, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant
to Section 4.2. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Notes which the Noteholder making the exchange is entitled to receive
bearing registration numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Note registrar) be
duly endorsed, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company, and the Notes shall be duly
executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Notes.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, unless otherwise required by law, all Notes to be traded
(i) to a QIB in accordance with Rule 144A shall be represented by a Note in
global form (the "144A Global Note") or (ii) to a Person who is not a U.S.
Person (as defined in Regulation S) who is acquiring the Note in an
offshore transaction (a "Foreign Person") in accordance with Regulation S
shall be represented by a Note in global form (the "Regulation S Global
Note") (the Rule 144A Global Note and the Regulation S Global Note
collectively referred to in this Indenture as the "Global Note"), the Rule
144A Global Note and the Regulation S Global Note being registered in the
name of the Depositary
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or the nominee of the Depositary. The transfer and exchange of beneficial
interests in the Global Note, which does not involve the issuance of a Note
in certificated form, shall be effected through the Depositary, in
accordance with this Indenture (including the restrictions on transfer set
forth herein) and the procedures of the Depositary therefor.
At any time at the request of the beneficial holder of an interest in
the Global Note to obtain a Note in certificated form, such beneficial
holder shall be entitled to obtain a Note in certificated form upon written
request to the Trustee and the Custodian in accordance with the standing
instructions and procedures existing between the Custodian and Depositary
for the issuance thereof. Upon receipt of any such request, the Trustee,
or the Custodian at the direction of the Trustee, will cause, in accordance
with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of the Rule
144A Global Note or Regulation S Global Note, as appropriate, to be reduced
by the principal amount of the Note in certificated form issued upon such
request to such beneficial holder and, following such reduction, the
Company will execute and the Trustee will authenticate and deliver to such
beneficial holder (or its nominee) a Note or Notes in certificated form in
the appropriate aggregate principal amount in the name of such beneficial
holder (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.
Any transfer of a beneficial interest in the Global Note which cannot
be effected through book-entry settlement must be effected by the delivery
to the transferee (or its nominee) of a Note or Notes in certificated form
registered in the name of the transferee (or its nominee) on the books
maintained by the Note registrar in accordance with the transfer
restrictions set forth herein. With respect to any such transfer, the
Trustee, or the Custodian at the direction of the Trustee, will cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Custodian, the aggregate principal amount of the
Rule 144A Global Note or Regulation S Global Note to be reduced by the
principal amount of the respective beneficial interest in the Rule 144A
Global Note or Regulation S Global Note being transferred and, following
such reduction, the Company will execute and the Trustee will authenticate
and deliver to the transferee (or such transferee's nominee, as the case
may be), a Note or Notes in certificated form in the appropriate aggregate
principal amount in the name of such transferee (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
(c) So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a Note in
certificated form to a QIB in accordance with Rule 144A or a Foreign Person
in accordance with Regulation S, and upon receipt of the Note or Notes in
certificated form being so transferred, together with a certification from
the transferor that the transferee is a QIB or a Foreign Person (or other
evidence satisfactory to the Trustee), the Trustee shall make, or direct
the
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Custodian to make, an endorsement on the Rule 144A Global Note or
Regulation S Global Note to reflect an increase in the aggregate principal
amount of the Notes represented by the Rule 144A Global Note or Regulation
S Global Note, and the Trustee shall cancel such Note or Notes in
certificated form and cause, or direct the Custodian to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Custodian, the aggregate principal amount of Notes
represented by the Rule 144A Global Note or Regulation S Global Note to be
increased accordingly; PROVIDED that no Note in certificated form, or
portion thereof, in respect of which the Company or an Affiliate of the
Company held any beneficial interest shall be included in the Global Note
until such Note in certificated form is freely tradable in accordance with
Rule 144(k); PROVIDED FURTHER that the Trustee shall issue Notes in
certificated form upon any transfer of a beneficial interest in the Global
Note to the Company or an Affiliate of the Company.
Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in
order for the Notes to be tradeable on the PORTAL Market or tradeable on
Euroclear or Cedel or as may be required for the Notes to be tradeable on
any other market developed for trading of securities pursuant to Rule 144A
or Regulation S under the Securities Act or required to comply with any
applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange or automated quotation system upon
which the Notes may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to
which any particular Notes are subject.
(d) Except if the restrictions on transfer set forth in this Section
2.5(d) shall be waived by written consent of the Company and except as
permitted by Section 2.5(g), every Note that bears or is required under
this Section 2.5(d) to bear the legend set forth in this Section 2.5(d)
(the "Restricted Notes") shall be subject to the restrictions on transfer
set forth in this Section 2.5(d) (including those set forth in the legend
set forth below) and the holder of each such Restricted Note, by such
Noteholder's acceptance thereof, agrees to be bound by all such
restrictions on transfer. As used in Section 2.5(d), the term "transfer"
encompasses any sale, pledge, transfer or other disposition whatsoever of
any Restricted Note.
Prior to the Resale Restriction Termination Date applicable to any
Note, any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof) shall bear a legend in
substantially the following form, unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY
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INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2),
(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
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Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance
with their terms or as to which the conditions for removal of the foregoing
legend set forth therein have been satisfied or transferred pursuant to an
effective registration statement under the Securities Act may, upon
surrender of such Note for exchange to the Note registrar in accordance
with the provisions of this Section 2.5, be exchanged for a new Note or
Notes, of like tenor and aggregate principal amount, which shall not bear
the restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(b) and in this
Section 2.5 (d)), a Global Note may not be transferred as a whole or in
part except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company
to act as Depositary with respect to the Global Note. Initially, the Rule
144A Global Note and the Regulation S Global Note shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for the Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for the Note, the
Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90)
days after the Company receives such notice, the Company will execute, and
the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Notes, will authenticate and deliver, Notes
in certificated form, in an aggregate principal amount equal to the
principal amount of the Global Note, in exchange for the Global Note.
If a Note in certificated form is issued in exchange for any portion
of a Global Note after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business
at such office or agency on the next succeeding interest payment date,
interest will not be payable on such interest payment date in respect of
such Note, but will be payable on such interest payment date only to the
person to whom interest in respect of such portion of such Global Note is
payable in accordance with the provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and
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authentication, the Trustee shall deliver such Notes in certificated form
to the persons in whose names such Notes in certificated form are so
registered.
At such time as all interests in a Global Note have been canceled or
exchanged for Notes in certificated form, or transferred to a transferee
who receives Notes in certificated form thereof, such Global Note shall,
upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and
the Custodian. At any time prior to such cancellation, if any interest in
a Global Note is exchanged for Notes in certificated form or canceled or
transferred to a transferee who receives Notes in certificated form
therefor or any Note in certificated form is exchanged or transferred for
part of a Global Note, the principal amount, of such Global Note shall, in
accordance with the standing procedures and instructions existing between
the Depositary and the Custodian, be appropriately reduced or increased, as
the case may be, and an endorsement shall be made on such Global Note, by
the Trustee or the Custodian, at the direction of the Trustee, to reflect
such reduction or increase. In the event of any transfer of any beneficial
interest between the Rule 144A Global Note and the Regulation S Global Note
in accordance with the standing procedures and instructions between the
Depository and the Custodian and the transfer restrictions set forth
herein, the aggregate principal amount of each Rule 144A Global Note and
Regulation S Global Note shall be appropriately increased or decreased, as
the case may be, and an endorsement shall be made on each Rule 144A Global
Note and Regulation S Global Note by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(e) Any certificate evidencing a Note that has been transferred to an
Affiliate of the Company within three years after the original issuance
date of the Note, as evidenced by a notation on the Assignment Form for
such transfer or in the representation letter delivered in respect thereof
(substantially in the form attached as an exhibit to the Offering
Memorandum), shall, until three years after the last date on which the
Company or any Affiliate of the Company was an owner of such Note, bear a
legend in substantially the following form, unless otherwise agreed by the
Company (with written notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY EXCEPT (A) TO SOLECTRON
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) IN A TRANSACTION REGISTERED
UNDER THE SECURITIES ACT OR (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY
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RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2) THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS
LEGEND SHALL BE REMOVED UPON THE TRANSFER OF THE NOTE EVIDENCED HEREBY
PURSUANT TO THE IMMEDIATELY PRECEDING SENTENCE. IF THE PROPOSED
TRANSFER IS PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR
A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(f) Notwithstanding any provision of Section 2.5 to the contrary, in
the event Rule 144(k) (or any successor rule) is amended to shorten the
three-year period under Rule 144(k) (or the corresponding period under any
successor rule), from and after receipt by the Trustee of the Officers'
Certificate and Opinion of Counsel provided for in this Section 2.5(f), (i)
the references in the definition of Resale Restriction Termination Date to
"three years" and in the restrictive legend set forth in such paragraph to
"THREE YEARS" shall be deemed for all purposes hereof to be references to
such shorter period and (ii) all corresponding references in the Notes and
the restrictive legends on the Restricted Notes shall be deemed for all
purposes hereof to be references to such shorter period, provided that such
changes shall not become effective if they are otherwise prohibited by, or
would otherwise cause a violation of, the then-applicable federal
securities laws. As soon as practicable after the Company has knowledge of
the effectiveness of any such amendment to shorten the three-year period
under Rule 144(k) (or the corresponding period under any successor rule),
unless such changes would otherwise be prohibited by, or would otherwise
cause a violation of, the then-applicable securities laws, the Company
shall provide to the Trustee an Officers' Certificate and Opinion of
Counsel informing the Trustee of the effectiveness of such amendment and
the effectiveness of the foregoing changes to Section 2.5(d) and the
restrictive legends on the Restricted Notes. This Section 2.5(f) shall
apply to successive amendments to Rule 144(k) (or any successor rule)
shortening the holding period thereunder.
(g) Notwithstanding the foregoing, upon consummation of the Exchange
Offer the Company shall issue and the Trustee shall authenticate, in
accordance with Section 2.4, Series B Notes in exchange for Series A Notes
accepted for exchange in the
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Exchange Offer, which Series B Notes shall be in either certificated or
global form and shall bear a CUSIP number different from the CUSIP number
or numbers for the Series A Notes and shall (a) not bear the legend set
forth in Section 2.5(d) and the Note registrar shall rescind any
restriction on the transfer of such Notes, in each case unless the holder
of such Series A Notes is either (1) a broker-dealer, (2) a Person
participating in the distribution of the Series A Notes or (3) a Person who
is an affiliate (as defined in Rule 144A) of the Company, (b) accrue
interest from the last date on which interest was paid or duly provided for
on the Series A Notes or, if no such interest has been paid, from the Issue
Date, (c) not contain certain provisions relating to Special Interest and
(d) not bear the legend relating to the Registration Rights Agreement.
Section 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and deliver, a new Note,
bearing a number not contemporaneously outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution for the Note so
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, 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 connected
therewith. In case any Note which has matured or is about to mature shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Note, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Note), as the case may be,
if the applicant for such payment shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in case of
destruction, loss or theft, evidence satisfactory to the Company, the Trustee
and, if applicable, any paying agent of the destruction, loss or theft of such
Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly
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issued hereunder. To the extent permitted by law, all Notes shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.7 TEMPORARY NOTES. Pending the preparation of Note in
certificated forms, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed, typewritten or lithographed).
Temporary Notes shall be issuable in any authorized denomination, and
substantially in the form of the Notes in certificated form, but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. Every such temporary Note shall be
executed by the Company and authenticated by the Trustee or such authenticating
agent upon the same conditions and in substantially the same manner, and with
the same effect, as the Notes in certificated form. Without unreasonable delay
the Company will execute and deliver to the Trustee or such authenticating agent
Notes in certificated form (other than in the case of Notes in global form) and
thereupon any or all temporary Notes (other than any such Note in global form)
may be surrendered in exchange therefor, at each office or agency maintained by
the Company pursuant to Section 4.2 and the Trustee or such authenticating agent
shall authenticate and deliver in exchange for such temporary Notes an equal
aggregate principal amount of Notes in certificated form. Such exchange shall
be made by the Company at its own expense and without any charge therefor.
Until so exchanged, the temporary Notes shall in all respects be entitled to the
same benefits and subject to the same limitations under this Indenture as Notes
in certificated form authenticated and delivered hereunder.
Section 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, exchange or registration of transfer, shall, if
surrendered to the Company or any paying agent or any Note registrar, be
surrendered to the Trustee and promptly canceled by it, or, if surrendered to
the Trustee, shall be promptly canceled by it, and no Notes shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy canceled Notes (unless the Company directs
it to do otherwise) and, after such destruction, shall, if requested by the
Company, deliver a certificate of such destruction to the Company. If the
Company shall acquire any of the Notes, such acquisition shall not operate as
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 REDEMPTION. The Notes are not subject to redemption prior
to maturity.
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ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 PAYMENT OF PRINCIPAL AND INTEREST. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and interest, including Special Interest and/or Additional
Interest, on each of the Notes at the places, at the respective times and in the
manner provided herein and in the Notes. Each installment of interest on the
Notes due on any semi-annual interest payment date may be paid by mailing checks
for the interest payable to or upon the written order of the holders of Notes
entitled thereto as they shall appear on the Note register; PROVIDED, that, with
respect to any holder of Notes with an aggregate principal amount equal to or in
excess of $5,000,000, at the request of such holder in writing to the Company
(who shall then furnish notice to such effect to the Trustee), interest on such
holder's Notes shall be paid by wire transfer in immediately available funds in
accordance with the wire transfer instructions supplied by such holder to the
Trustee and paying agent (if different from the Trustee).
Section 4.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency not designated or appointed by the Trustee.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office or the office or agency of the Trustee in the Borough of
Manhattan, The City of New York.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will give prompt written notice to
the holders of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar and Custodian, and each of the Corporate Trust Office of the Trustee
and the office or agency of the Trustee in the Borough of Manhattan, The City of
New York (which shall initially be State Street Bank and Trust Company, N.A., an
Affiliate of the Trustee located at 61 Broadway, Concourse Level, Corporate
Trust Window, New York, New York 10006), one such office or agency of the
Company for each of the aforesaid purposes.
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The Trustee agrees to mail, or cause to be mailed, the notices set forth in
Section 7.10(a) and the third paragraph of Section 7.11.
Section 4.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 4.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause
such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of
this Section 4.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of or interest on the Notes (whether such
sums have been paid to it by the Company or by any other obligor on
the Notes) in trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of
the principal of or interest on the Notes when the same shall be due
and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of or
interest on the Notes, deposit with the paying agent a sum sufficient to pay
such principal or interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action;
PROVIDED that if such deposit is made on the due date, such deposit shall be
received by the paying agent by 10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of or interest on the Notes, set
aside, segregate and hold in trust for the benefit of the holders of the
Notes a sum sufficient to pay such principal or interest so becoming due
and will notify the Trustee of any failure to take such action and of any
failure by the Company (or any other obligor under the Notes) to make any
payment of the principal of or interest on the Notes when the same shall
become due and payable.
(c) Anything in this Section 4.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of
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this Indenture, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 4.4, such sums to be held by the Trustee upon
the trusts herein contained and upon such payment by the Company or any
paying agent to the Trustee, the Company or such paying agent shall be
released from all further liability with respect to such sums.
(d) Anything in this Section 4.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.4 is subject
to Sections 12.3 and 12.4.
Section 4.5 CORPORATE EXISTENCE. Subject to Article XI, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 4.6 RULE 144A INFORMATION REQUIREMENT. During the period
beginning on the latest date of the original issuance of the Notes and ending on
the date that is three years from such date, the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available to any holder or beneficial holder
of Notes which continue to be Restricted Notes in connection with any sale
thereof and any prospective purchaser of Notes from such holder or beneficial
holder, the information required pursuant to Rule 144A(d)(4) under the
Securities Act upon the request of any holder or beneficial holder of the Notes
and it will take such further action as any holder or beneficial holder of such
Notes may reasonably request, all to the extent required from time to time to
enable such holder or beneficial holder to sell its Notes without registration
under the Securities Act with the limitation of the exemption provided by Rule
144A, as such Rule may be amended from time to time. Upon the request of any
holder or any beneficial holder of the Notes, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.
Section 4.7 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
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Section 4.8 LIMITATION ON LIENS. The Company covenants that, so long as
any of the Notes remain outstanding, it shall not, and shall 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 ("mortgage") upon any Principal Property or upon any shares of
stock or indebtedness for borrowed money or evidenced by a bond, note, debenture
or similar instrument of any Restricted Subsidiary owned by the Company or a
Restricted Subsidiary (whether such Principal Property, 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, or the grant of such mortgage,
that the Notes (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 Notes) shall be secured equally and ratably with (or,
at the option of the Company, prior to) such secured debt. The foregoing
restriction, however, shall 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) mortgages on property, shares of stock or
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 or a Restricted Subsidiary 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 mortgages on property, shares of stock or indebtedness or other assets to
secure any debt incurred prior to, at the time of, or within 180 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 original
issuance of the Notes; (e) mortgages on property of a Person existing at the
time such Person 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 Person 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) (including successive extensions, renewals and replacements); provided,
however, that mortgages permitted by any of the foregoing clauses (a) through
(f) shall not extend to or cover any other Principal Property of the Company or
any Restricted
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Subsidiary or any shares of stock or indebtedness of any such Restricted
Subsidiary, other than the property, including improvements thereto, stock or
indebtedness specified in such clauses.
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 Notes, provided that
after giving effect thereto, the aggregate amount of all debt then outstanding
so secured by mortgages (not including mortgages permitted under any of clauses
(a) through (g) above) plus Attributable Debt of the Company and Restricted
Subsidiaries in respect of Sale and Lease-Back Transactions entered into after
the date of original issuance of the Notes (other than any Sale and Lease-Back
Transaction permitted under clause (b) of Section 4.9 and other than any Sale
and Lease-Back Transaction with respect to any Principal Property as to which
the Company or a Restricted Subsidiary would be entitled to incur indebtedness
secured by a mortgage on such Principal Property at least equal in amount to the
Attributable Debt with respect to such Sale and Lease-Back Transaction under any
of clauses (a) through (g) above) does not at the time such debt is issued,
incurred, created, assumed or guaranteed exceed an amount equal to 10% of the
Consolidated Net Tangible Assets of the Company.
Section 4.9 LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS. The Company
covenants that, so long as any of the Notes remain outstanding, it shall not,
nor shall it permit any Restricted Subsidiary to, enter into any Sale and Lease-
Back Transaction with respect to any Principal Property, 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 Notes, pursuant
to the limitation on liens described in Section 4.8; or (b) the Company shall
apply an amount equal to the greater of the net proceeds of such sale, the fair
market value of such property at the time of such sale (as determined in good
faith by the Company) 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 has a scheduled
maturity more than 12 months after its creation or (ii) the purchase,
construction, improvement or development of other comparable property.
Section 4.10 INITIAL RATING FROM NAIC. The Company shall use its
reasonable efforts to assist in the process of obtaining the Initial Rating from
the NAIC as promptly as practicable.
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Section 4.11 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company a brief
certificate from the principal executive, financial or accounting officer of the
Company, as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under the Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under the Indenture).
ARTICLE V
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each February 15 and August 15 in each year
beginning with August 15, 1996, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished so long as the Trustee is acting as Note
registrar.
Section 5.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders
of Notes contained in the most recent list furnished to it as provided in
Section 5.1 or maintained by the Trustee in its capacity as Note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided
in Section 5.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Notes
made pursuant to the Trust Indenture Act.
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Section 5.3 REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the year
1996, the Trustee shall transmit to holders of Notes such reports dated as
of May 15 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the
Company. The Company will notify the Trustee within a reasonable time when
the Notes are listed on any stock exchange and automated quotation system.
Section 5.4 REPORTS BY COMPANY. The Company shall file with the Trustee
(and the Commission if at any time the Indenture becomes qualified under the
Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; 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 VI
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 6.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest, including
Special Interest and/or Additional Interest, upon any of the Notes as and
when the same shall become due and payable, and continuance of such default
for a period of thirty (30) days; or
(b) default in the payment of the principal of any of the Notes as
and when the same shall become due and payable at maturity, by acceleration
or otherwise; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Notes or in this
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Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 6.1 specifically
dealt with) continued for a period of ninety (90) days after the date on
which written notice of such failure, requiring the Company to remedy the
same, shall have been given to the Company by the Trustee, or to the
Company and a Responsible Officer of the Trustee by the holders of at least
25 percent in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 8.4; or
(d) failure on the part of the Company to make any payment at
maturity, including any applicable grace period, in respect of indebtedness
for borrowed money of the Company or guarantee of payment by the Company of
any obligation of any Person for borrowed money, which payment is in an
amount in excess of $25 million, without such indebtedness or guarantee
having been discharged or paid or such default having been cured or waived,
and continuance of such failure for a period of thirty (30) days after the
date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or to
the Company and a Responsible Officer of the Trustee by the holders of at
least 25 percent in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 8.4; or
(e) default by the Company with respect to any indebtedness for
borrowed money of the Company or guarantee of payment by the Company of any
obligation of any Person for borrowed money, in each case, in an amount in
excess of $25 million, which default results in acceleration of such
indebtedness or guarantee without such indebtedness or guarantee having
been discharged or paid or such acceleration having been rescinded or
annulled for a period of thirty (30) days after the date on which written
notice of such acceleration, requiring the Company to remedy the same,
shall have been given to the Company by the Trustee, or to the Company and
a Responsible Officer of the Trustee by the holders of at least 25 percent
in aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 8.4; or
(f) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(g) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect
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or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 6.1 (f) or (g)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25 percent in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 8.4, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the principal
of all the Notes and the interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 6.1 (f) or (g) occurs, the principal of all the Notes and the interest
accrued thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
condition that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest, including Special Interest and/or
Additional Interest, upon all Notes and the principal of any and all Notes which
shall have become due otherwise than by acceleration (with interest on overdue
installments of interest, including Special Interest and/or Additional Interest
(to the extent that payment of such interest is enforceable under applicable
law), and on such principal, at the rate borne by the Notes, to the date of such
payment or deposit) and amounts due to the Trustee pursuant to Section 7.6, and
if any and all defaults under this Indenture, other than the nonpayment of
principal of and accrued interest on Notes which shall have become due by
acceleration, shall have been cured or waived pursuant to Section 6.7 -- then
and in every such case the holders of a majority in aggregate principal amount
of the Notes then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or Event of Default, or
shall impair any right consequent thereon. The Company shall notify a
Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any
Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
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Section 6.2 PAYMENTS OF NOTES ON DEFAULT: SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
(30) days, or (b) in case default shall be made in the payment of the principal
of any of the Notes as and when the same shall have become due and payable, at
maturity of the Notes, by declaration or otherwise -- then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall have become due and payable on all
such Notes for principal or interest, or both, as the case may be, with interest
upon the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and interest on the Notes to the registered holders,
whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Notes, and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
Noteholders allowed in such judicial proceedings relative to the Company or any
other obligor on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of any
amounts due the Trustee under Section 7.6; and any receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, custodian or similar official is
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hereby authorized by each of the Noteholders to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the making of such
payments directly to the Noteholders, to pay to the Trustee any amount due it
for reasonable compensation, expenses, advances and disbursements, including
counsel fees incurred by it up to the date of such distribution. To the extent
that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture or under
any of the Notes may be enforced by the Trustee without the possession of any of
the Notes, or the production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
Section 6.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VI shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section
7.6;
Second: In case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the Notes in
default in the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at the rate borne by the
Notes, such payments to be made ratably to the persons entitled thereto;
Third: In case the principal of the outstanding Notes shall have
become due, by declaration or otherwise, and be unpaid to the payment of
the whole amount then owing and unpaid upon the Notes for principal and
interest, with interest on the overdue principal and (to the extent that
such interest has been collected by the Trustee) upon overdue installments
of interest at the rate borne by the Notes; and in
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case such monies shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Notes, then to the payment of such principal and
interest without preference or priority of principal over interest, or of
interest over principal or of any installment of interest over any other
installment of interest, or of any Note over any other Note, ratably to the
aggregate of such principal and accrued and unpaid interest; and
Fourth: To the payment of the remainder, if any, to the Company or any
other person lawfully entitled thereto.
Section 6.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25 percent in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more holders of Notes shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 6.4, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of and interest on such Note, on or after the respective due dates
expressed in such Note, or to institute suit for the enforcement of any such
payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.
Section 6.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or
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otherwise, whether for the specific enforcement of any covenant or agreement
contained in the Indenture or in aid of the exercise of any power granted in
this Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
Section 6.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
the last paragraph of Section 2.6, all powers and remedies given by this Article
VI to the Trustee or to the Noteholders shall, to the extent permitted by law,
be deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 6.4, every power and remedy given by this Article VI or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the Noteholders.
Section 6.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 8.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; PROVIDED, HOWEVER, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, and (b) the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest on, or the principal of, the Notes or (ii) a default
in respect of a covenant or provisions hereof which under Article X cannot be
modified or amended without the consent of the holders of all Notes then
outstanding. Upon any such waiver the Company, the Trustee and the holders of
the Notes shall be restored to their former positions and rights hereunder; but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event
of Default hereunder shall have been waived as permitted by this Section 6.7,
said default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 6.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after it has knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
register, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured or waived before the giving of such notice; and
PROVIDED that, except in the case of default in the payment of the principal of
or interest on any of the Notes, the Trustee shall be protected in withholding
such notice if and
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so long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Noteholders; and PROVIDED, FURTHER, that such notice shall not
be given until ninety (90) days after the occurrence of a default with respect
to outstanding Notes in the performance of a covenant in this Indenture other
than for the payment of the principal of or interest on any Note. The term
"default" with respect to the Notes for the purpose only of this provision means
the happening of any of the Events of Default specified in Section 6.1 excluding
any grace periods and irrespective of any notice requirements.
Section 6.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed
to have agreed, that any court may, in its discretion, require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the
costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; PROVIDED that the provisions
of this Section 6.9 (to the extent permitted by law) shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than ten percent in
principal amount of the Notes at the time outstanding determined in
accordance with Section 8.4, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or interest on any Note on
or after the due date expressed in such Note.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
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(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(2) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but, in the case
of any such certificates or opinions which by any provisions hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the Notes
at the time outstanding determined as provided in Section 8.4 relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 7.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 7.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties;
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(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall 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; PROVIDED, HOWEVER, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liability as a condition to so
proceeding; the reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any predecessor Trustee, shall
be repaid by the Company upon demand; and
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
Section 7.3 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
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Section 7.4 TRUSTEE, PAYING AGENTS OR REGISTRAR MAY OWN NOTES. The
Trustee, any paying agent or Note registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes with the same rights it would
have if it were not Trustee, paying agent or Note registrar.
Section 7.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 12.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
Section 7.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any loss, liability or expense incurred without
negligence, willful misconduct, recklessness, or bad faith on the part of the
Trustee or such agent or authenticating agent, as the case may be, and arising
out of or in connection with the acceptance or administration of this trust or
in any other capacity hereunder, including the costs and expenses of defending
themselves against any claim of liability in the premises. The obligations of
the Company under this Section 7.6 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 6.1 (f) or (g)
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy, insolvency or
similar laws.
Section 7.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 7.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
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prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
Section 7.8 CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 7.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.10 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the resigning Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment sixty (60) days after the mailing of such notice of resignation
to the Noteholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide holder of a Note or Notes for at least
six months may, subject to the provisions of Section 6.9, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 7.8 after
written request therefor by the Company or by any Noteholder who has
been a bona fide holder of a Note or Notes for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.9 and shall fail to resign after written
request therefor by the Company or by any such Noteholder; or
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(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject
to the provisions of Section 6.9, any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten (10) days after notice to the Company of such
nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as
in Section 7.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 7.11.
Section 7.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 7.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
7.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
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of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 7.6.
No successor trustee shall accept appointment as provided in this Section
7.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 7.8 and be eligible under the
provisions of Section 7.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 7.11, the Company (or the former trustee, at the written direction of
the Company) shall mail or cause to be mailed notice of the succession of such
trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within
ten (10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 7.12 SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee such
corporation shall be qualified under the provisions of Section 7.8 and eligible
under the provisions of Section 7.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor
trustee may authenticate such Notes either in the name of any predecessor
trustee hereunder or in the name of the successor trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 7.13 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
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ARTICLE VIII
CONCERNING THE NOTEHOLDERS
Section 8.1 ACTION BY NOTEHOLDER. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article IX, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 8.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the
provisions of Sections 7.1, 7.2 and 9.5, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 9.6.
Section 8.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any authenticating agent, any paying agent and any Note registrar may deem the
person in whose name such Note shall be registered upon the Note register to be,
and may treat him as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and interest on such Note and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any authenticating agent nor any Note
registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
Section 8.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company
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or any other obligor on the Notes or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Notes shall be disregarded and deemed not to
be outstanding for the purpose of any such determination; PROVIDED that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Notes which a Responsible
Officer knows are so owned shall be so disregarded. Notes so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this Section 8.4 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Notes and that the pledgee is not the
Company, any other obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In the case of a dispute as to such right,
any decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described persons; and, subject to Section 7.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.
Section 8.5 REVOCATION OF CONSENTS: FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
8.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 8.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note
shall be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE IX
NOTEHOLDERS' MEETINGS
Section 9.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article IX
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to consent
to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by
Noteholders pursuant to any of the provisions of Article VI;
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(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VII;
(3) to consent to the execution of an indenture or indentures,
supplemental hereto, pursuant to the provisions of Section 10.2; or
(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable law.
Section 9.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 9.1, to be
held at such time and at such place at a location within 10 miles of the
Corporate Trust Office or the Borough of Manhattan, The City of New York, as the
Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 8.1, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 9.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place at any location within
10 miles of the Corporate Trust Office or the Borough of Manhattan, The City of
New York for such meeting and may call such meeting to take any action
authorized in Section 9.1, by mailing notice thereof as provided in Section 9.2.
Section 9.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
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Section 9.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 9.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 8.4, at any meeting each Noteholder or
proxy-holder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; PROVIDED, HOWEVER, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 9.2 or 9.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 9.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 9.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
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Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 9.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article IX
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Notes, any property or assets;
(b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article XI;
(c) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; PROVIDED, HOWEVER, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(d) add to the Events of Default of the Company such further events
of default as the Board of Directors and the Trustee shall consider to be
for the benefit of the holders of the Notes;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to
provide for exchangeability of
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such Notes with the Notes issued hereunder in fully registered form and to
make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not
materially adversely affect the interests of the holders of the Notes
hereunder;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
10.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 10.2.
Section 10.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With
the consent (evidenced as provided in Article VIII) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) change the stated maturity of any Note, or reduce the rate
or change the time of payment of interest thereon, or reduce the principal
amount thereof, or impair the right of any Noteholder to institute suit for the
payment thereof, or make the principal thereof or interest thereon payable in
any coin or currency or at any place other than that provided in the Notes, or
(ii) reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding.
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Upon the request of the Company, accompanied by a copy of the resolutions
of the Board of Directors certified by its Secretary or an Assistant Secretary
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Noteholders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 10.3 EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental
indenture executed pursuant to the provisions of this Article X shall comply
with the Trust Indenture Act, as then in effect; PROVIDED that this Section 10.3
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article X, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 10.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article X may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 15.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 10.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 7.1 and
7.2, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article X.
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ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 11.1 COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to
the provisions of Section 11.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company as an entirety, to any other
corporation (whether or not affiliated with the Company), authorized to acquire
and operate the same and which, in each case, shall be organized under the laws
of the United States of America, any state thereof or the District of Columbia;
PROVIDED, that (a) upon any such consolidation, merger, sale, conveyance or
lease, the due and punctual payment of the principal of and interest on all of
the Notes, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation (if other than the Company) formed by such consolidation, or
into which the Company shall have been merged, or by the corporation which shall
have acquired or leased such property and (b) 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. For purposes of clause (b) hereof, if the corporation with or into
which the Company is consolidated or merged (in a transaction in which the
Company is not the surviving corporation) or to which the Company sells, conveys
or leases all or substantially all of the property of the Company as an entirety
has, at the time of such transaction, outstanding indebtedness secured by a
mortgage, such indebtedness shall be treated as having been incurred by the
Company or a Restricted Subsidiary at the time of such consolidation, merger,
sale, conveyance or lease, if and only to the extent that, as a result of such
transaction, such mortgage extends to or covers any Principal Property of the
Company or any Restricted Subsidiary or any shares of stock or indebtedness for
borrowed money or evidenced by a bond, note, debenture or similar instrument of
any such Restricted Subsidiary which was a Principal Property of the Company or
a Restricted Subsidiary or shares of stock or such indebtedness of any
Restricted Subsidiary immediately prior to the effective time of such
transaction.
Section 11.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and interest on all of the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Company, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part. Such successor corporation thereupon may cause
to be signed, and may
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issue either in its own name or in the name of Solectron Corporation any or all
of the Notes issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver, or cause to be authenticated and delivered, any Notes which
previously shall have been signed and delivered by the officers of the Company
to the Trustee for authentication, and any Notes which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Notes so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Notes theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Notes had been issued at the date of the execution hereof. In the event of any
such consolidation, merger, sale or conveyance (but not in the case of any such
lease), the person named as the "Company" in the first paragraph of this
Indenture or any successor which shall thereafter have become such in the manner
prescribed in this Article XI may be dissolved, wound up and liquidated at any
time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
Section 11.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to Sections 7.1 and 7.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 12.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year, and the Company
shall deposit with the Trustee, in trust, funds sufficient to pay at maturity
all of the Notes (other than any Notes which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and interest,
including Special Interest and/or Additional Interest, due or to become due to
such date of maturity, and if in either case the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) remaining rights of
registration of transfer, substitution and exchange of Notes,
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(ii) rights hereunder of Noteholders to receive payments of principal of and
interest, including Special Interest and/or Additional Interest, on, the Notes
and the other rights, duties and obligations of Noteholders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee and
(iii) the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as required by Section 15.5 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes.
Section 12.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 12.4, all monies deposited with the Trustee pursuant to Section 12.1
shall be held in trust for the sole benefit of the Noteholders, and such monies
shall be applied by the Trustee to the payment, either directly or through any
paying agent (including the Company if acting as its own paying agent), to the
holders of the particular Notes for the payment of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, including Special Interest and/or Additional Interest.
Section 12.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent for
the Notes (other than the Trustee) shall, upon written request of the Company,
be repaid to the Company or paid to the Trustee, and thereupon such paying agent
shall be released from all further liability with respect to such monies.
Section 12.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of or interest on Notes and not applied but remaining unclaimed by
the holders of Notes for two years after the date upon which the principal of or
interest on such Notes, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee on demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and the holder of any
of the Notes shall thereafter look only to the Company for any payment which
such holder may be entitled to collect unless an applicable abandoned property
law designates another Person.
Section 12.5 REINSTATEMENT. If the Trustee or the paying agent is unable
to apply any money in accordance with Section 12.2 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 12.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 12.2;
PROVIDED, HOWEVER, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of
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the holders of such Notes to receive such payment from the money held by the
Trustee or paying agent.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of or interest, including Special
Interest and/or Additional Interest, on any Note, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Notes.
ARTICLE XIV
DEFEASANCE AND COVENANT DEFEASANCE
Section 14.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may at its option by resolution of the Board of Directors, at
any time, elect to have either Section 14.2 or Section 14.3 be applied to the
outstanding Notes upon compliance with the conditions set forth below in this
Article XIV.
Section 14.2 DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option to effect a defeasance of the
Notes pursuant to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "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 Notes
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of holders of outstanding Notes to receive, solely
from the trust fund described in Section 14.4 and as more fully set forth in
such Section, payments in respect of the principal of and interest, including
Special Interest
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and/or Additional Interest, on such Notes when such payments are due; (B) the
Company's obligations with respect to such Notes under Sections 2.5, 2.6, 2.7,
4.2 and 4.4(b), (C) the rights, powers, trusts, duties, and immunities of the
Trustee hereunder including those in Section 7.6 and (D) this Article XIV.
Subject to compliance with this Article XIV, the Company may exercise its option
under this Section 14.2 notwithstanding the prior exercise of its option under
Section 14.3.
Section 14.3 COVENANT DEFEASANCE.
Upon the Company's exercise of its option to effect a covenant defeasance
of the Notes pursuant to this Section, the Company shall be released from its
obligations under Sections 4.8 and 4.9 (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in such
Sections, whether directly or indirectly by reason of any reference elsewhere
herein to any such Sections or by reason of any reference in such Sections to
any other provision herein or in any other document, but the Company's
obligations under this Indenture and such Notes except for such Sections shall
be unaffected thereby.
Section 14.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section 14.2
or Section 14.3 to the outstanding Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.9 who shall agree to comply with the provisions of this
Article XIV applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the holders of such Notes, (A) money in
an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee
(or other qualifying trustee) to pay and discharge, the principal of and
each installment of interest, including Special Interest and/or Additional
Interest, on the outstanding Notes upon maturity of such principal or
installment of interest;
(b) Such defeasance or covenant defeasance shall not cause the
Trustee for the Notes to have a conflicting interest as defined in Section
7.8 and for purposes of the Trust Indenture Act with respect to any
securities of the Company;
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(c) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company or any Restricted
Subsidiary is a party or by which it or any Restricted Subsidiary is bound;
(d) Such defeasance or covenant defeasance shall not cause any Notes
then listed on any registered national securities exchange under the
Exchange Act to be delisted;
(e) In the case of an election under Section 14.2, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that the
holders of the outstanding Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(f) In the case of an election under Section 14.3, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that the
holders of the outstanding Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of such covenant defeasance and
will be subject to the Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred;
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 14.2
or the covenant defeasance under Section 14.3 (as the case may be) have
been complied with; and
(h) In the case of an election under Section 14.2, no Event of
Default or event which with notice or lapse of time or both would become an
Event of Default with respect to the Notes shall have occurred and be
continuing on the date of such deposit or at any time during the period
ending on the 91st day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period).
Section 14.5 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of Section 12.4, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee -- collectively, for purposes of this Section 14.5, the
"Trustee") pursuant to Section 14.4 in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes 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
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determine, to the holders of such Notes, of all sums due and to become due
thereon in respect of principal and interest, but such money 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 14.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of the outstanding Notes.
Anything in this Article XIV to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the written order of
the Company, signed by its (a) President, Executive or Senior Vice President or
any Vice President and (b) Treasurer or Assistant Treasurer or Secretary or
Assistant Secretary, any money or U.S. Government Obligations held by it as
provided in Section 14.4 which, 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 which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 15.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 15.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company' with the
Trustee) to Solectron Corporation, 847 Gibraltar Drive, Building 5, Milpitas,
California 95035, Attention: Chief Financial Officer. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as
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of which this Indenture is dated, located at 2 International Place, Boston,
Massachusetts, Attention: Corporate Trust Division (Solectron Corporation, 7
3/8% Senior Notes due 2006).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 15.4 GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of the State of New
York.
Section 15.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 15.6 LEGAL HOLIDAYS. In any case where the date of maturity of
interest on or principal of the Notes will not be a Business Day, then payment
of such interest on or principal of the Notes need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the date of maturity, and no interest shall accrue for the period
from and after such date.
Section 15.7 TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
PROVIDED, HOWEVER, that, unless otherwise
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required by law, notwithstanding the foregoing, this Indenture and the Notes
issued hereunder shall not be subject to the provisions of subsections (a)(1),
(a)(2), and (a) (3) of Section 314 of the Trust Indenture Act as now in effect
or as hereafter amended or modified; PROVIDED, FURTHER, that this Section 15.7
shall not require this Indenture or the Trustee to be qualified under the Trust
Indenture Act prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in an indenture qualified under the Trust Indenture Act, such
required provision shall control.
Section 15.8 NO SECURITY INTEREST CREATED. Except as set forth in
Section 7.6, nothing in this Indenture or in the Notes, expressed or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect, in any jurisdiction where property of the Company or its subsidiaries is
located.
Section 15.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder and the holders of Notes, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 15.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 15.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6 and 2.7, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 7.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding
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to the corporate trust business of any authenticating agent, shall be the
successor of the authenticating agent hereunder, if such successor corporation
is otherwise eligible under this Section 15.11, without the execution or filing
of any paper or any further act on the part of the parties hereto or the
authenticating agent or such successor corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 7.6.
The provisions of Sections 7.2, 7.3, 7.4, 8.3 and this Section 15.11 shall
be applicable to any authenticating agent.
Section 15.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
State Street Bank and Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, all as of the date first written above.
SOLECTRON CORPORATION
By: /s/ Susan Wang
-------------------------------------
Name: Susan Wang
-----------------------------------
Title: Senior Vice President and Chief
Financial Officer
----------------------------------
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: /s/ E. Decker Adams
-------------------------------------
Name: E. Decker Adams
-----------------------------------
Title: Vice President
----------------------------------
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EXHIBIT A
[For global Note only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF THE REGISTRATION RIGHTS
AGREEMENT REFERRED TO BELOW AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
SOLECTRON CORPORATION
7-3/8% SENIOR NOTE DUE 2006
No. CUSIP
---- -------------
Solectron Corporation, a corporation duly organized and validly existing
under the laws of the State of California (herein called the "Company"), which
term includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to [for global Note,
insert: CEDE & CO.] or registered assigns, the principal sum of
______________________________ ($_______________) on March 1, 2006, at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or, at the option of the holder of this Note,
at the Corporate Trust Office, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semi-annually on March 1 and
September 1 of each year, commencing September 1, 1996, on said principal sum at
said office or agency, in like coin or currency, at the rate per annum of 7-3/8%
(the "Initial Rate") plus Special Interest (as defined herein), if any, plus
Additional Interest (as defined herein), if any, from March 1 or September 1, as
the case may be, next preceding the date of this Note to which interest has been
paid or duly provided for, unless the date hereof is a date to which interest
has been paid or duly provided for, in which case from the date of this Note, or
unless no interest has been paid or duly provided for on the Notes, in which
case from February 29,
<PAGE>
1996, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any February 15 or
August 15, as the case may be, and before the following March 1 or September 1,
this Note shall bear interest from such March 1 or September 1; PROVIDED,
HOWEVER, that if the Company shall default in the payment of interest due on
such March 1 or September 1, then this Note shall bear interest from the next
preceding March 1 or September 1 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such Note,
from February 29, 1996. Notwithstanding any provision herein to the contrary,
Special Interest, if any, shall be subject to the accrual commencement and
accrual termination provisions applicable thereto. The interest payable on the
Note pursuant to the Indenture on any March 1 or September 1 will 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 record date, which shall be the February 15 or
August 15 (whether or not a Business Day) next preceding such March 1 or
September 1, as provided in the Indenture; PROVIDED, HOWEVER, that any such
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. Interest may, at the option of the Company, be paid by check
mailed to the registered address of such person on the Note register; PROVIDED,
HOWEVER, that, with respect to any holder of Notes with an aggregate principal
amount equal to or in excess of $5,000,000, at the request of such holder in
writing to the Company (who shall then furnish written notice to such effect to
the Trustee), interest on such holder's Notes shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instructions
supplied by such holder to the Trustee and paying agent (if different from the
Trustee).
Any accrued and unpaid interest (including Special Interest and/or
Additional Interest) on this Note upon the issuance of an Exchange Note in
exchange for this Note shall cease to be payable to the holder hereof but such
accrued and unpaid interest (including Special Interest and/or Additional
Interest) shall be payable on the next March 1 or September 1 to the holder of
such Exchange Note on the related record date.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the State
of New York, and for all purposes shall be construed in accordance with and
governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
under its corporate seal.
Dated: SOLECTRON CORPORATION
-----------------
By:
----------------------------
Attest:
----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the
within-named Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
-----------------------------
Authorized Signatory
By:
-----------------------------
As Authenticating Agent (if different from Trustee)
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<PAGE>
[FORM OF REVERSE OF NOTE]
SOLECTRON CORPORATION
7-3/8% SENIOR NOTE DUE 2006
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 7-3/8% Senior Notes due 2006 (herein called the "Notes"),
limited to the aggregate principal amount of $150,000,000 all issued or to be
issued under and pursuant to an indenture dated as of February 15, 1996 (herein
called the "Indenture"), between the Company and State Street Bank and Trust
Company as trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Notes; PROVIDED, HOWEVER, that no such supplemental indenture
shall (i) change the stated maturity of any Note, or reduce the rate or change
the time of payment of interest thereon, or reduce the principal amount thereof,
or impair the right of any Noteholder to institute suit for the payment thereof,
or make the principal thereof or interest thereon payable in any coin or
currency or at any place other than that provided in the Note, or (ii) reduce
the aforesaid percentage of Notes, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Notes then outstanding. It is also provided in the Indenture that the holders
of a majority in aggregate principal amount of the Notes at the time outstanding
may on behalf of the holders of all of the Notes waive any past default or Event
of Default under the Indenture and its consequences except a default in the
payment of interest or the principal of any of the Notes. Any such consent or
waiver by the holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Note or such other Notes.
<PAGE>
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 interest on this Note at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.
The holder of this Note is entitled to the benefits of the Registration
Rights Agreement dated as of February 26, 1996 among the Company and the Initial
Purchasers named therein (the "Registration Rights Agreement") and, by its
acceptance hereof, agrees to be bound by and to comply with the provisions of
such Registration Rights Agreement. In certain events, in addition to the
stated interest at the Initial Rate plus Additional Interest, if any, the
Company will pay special interest at the rate of 0.50% per annum on the
principal amount of the Notes ("Special Interest"), subject to the terms of and
as set forth more fully in the Registration Rights Agreement.
In the event that (a) the rating initially assigned to the Notes by the
NAIC (the "Initial Rating") is below NAIC-2 or (b) no Initial Rating has been
assigned to the Notes by September 1, 1996, then, in addition to the stated
interest at the Initial Rate plus Special Interest, if any, the Company will
permanently pay additional interest at the rate of 0.25% per annum on the
principal amount of the Notes (the "Additional Interest"), beginning on (i) in
the case of clause (a) above, either (x) the date the Initial Rating is publicly
announced or notice thereof is received by the Company or (y) if such public
announcement or notice occurs between a record date and an interest payment
date, such interest payment date or (ii) in the case of clause (b) above,
September 1, 1996 (each of the dates described in clause (i) and (ii) an
"Interest Adjustment Date"); PROVIDED, HOWEVER, that the Company will not pay
Additional Interest if the Initial Rating is NAIC-2 or better, notwithstanding a
change in the NAIC rating assigned to the Notes subsequent to the determination
of the Initial Rating or any other event; and PROVIDED, FURTHER, that there will
not be more than one adjustment for Additional Interest. If the Interest
Adjustment Date occurs during an interest payment period, the Notes will bear
interest for such interest payment period at a rate per annum equal to the
weighted average of (a) the Initial Rate and (b) the Initial Rate plus 0.25%,
which weighted average shall be calculated by multiplying the Initial Rate, or
the Initial Rate plus 0.25%, as applicable, by the number of days such interest
rate is in effect during each month of such interest payment period, determining
the sum of such products, and dividing such sum by the number of days in such
interest payment period.
All calculations pursuant to the preceding paragraph (and all other
calculations of interest on the Notes) shall be made on the basis of a 360-day
year consisting of twelve 30-day months.
The Notes are issuable in registered form without coupons in denominations
of $1,000 and any integral multiple of $1,000. At the office or agency of the
Company referred to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, without payment of any service charge but
with payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration or
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<PAGE>
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.
The Notes are not subject to redemption prior to maturity.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent and
any Note registrar may deem and treat the registered holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Note registrar), for the purpose of receiving
payment hereof, or on account hereof and for all other purposes, and neither the
Company nor the Trustee nor any other authenticating agent nor any paying agent
nor any Note registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.
No recourse for the payment of the principal of or interest, including any
Special Interest and/or Additional Interest, on this Note, or for any claim
based hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any
indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -- Custodian
--------- ------
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors Act
JT TEN - as joint tenants with ---------------------------------------------
right of survivorship (State)
and not as tenants in
common
Additional abbreviations may also be used
though not in the above list.
<PAGE>
ASSIGNMENT
For value received__________________hereby sell(s), assign(s) and
transfers(s) unto_________________(Please insert name, social security or other
Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints___________________attorney to transfer the
said Note on the books of the Company, with full power of substitution in the
premises.
Dated:
----------- ---------------------------------------------
---------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17 Ad-15 if Notes are to be
delivered other than to and in the name of
the registered holder.
---------------------------------------------
Signature Guarantee
<PAGE>
CERTIFICATE OF TRANSFER
In connection with any transfer of the within Note within three years of
the date of original issuance of such Note, the undersigned confirms that such
Note is being transferred:
/ / To Solectron Corporation or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended (which Institutional
Accredited Investor shall have furnished to the Trustee a signed
letter containing certain representations and agreements (the form of
which can be obtained from the Trustee)); or
/ / Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
/ / The transferee is an Affiliate of the Company.
Dated:
-------------- -------------------------------------
Signature
<PAGE>
- - --------------------------------------------------------------------------------
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
among
Solectron Corporation,
Issuer,
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Morgan Stanley & Co. Incorporated,
and
Hambrecht & Quist LLC,
Initial Purchasers
Dated as of February 26, 1996
- - --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of February 26, 1996, among SOLECTRON CORPORATION, a California
corporation (the "Company"), and MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, MORGAN STANLEY & CO. INCORPORATED and HAMBRECHT &
QUIST LLC (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement dated February
26, 1996 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of an aggregate of $150,000,000 principal amount of the Company's 7
3/8% Series A Senior Notes due 2006 (the "Debt Securities"). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree, and all other
Holders (as defined below) of Registrable Securities from time to time, by their
acceptance thereof, shall be conclusively deemed to have agreed, as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"CLOSING DATE" shall mean the date on which the Closing Time (as
defined in the Purchase Agreement) occurs.
"COMPANY" shall have the meaning set forth in the preamble and also
includes the Company's successors.
"DEBT SECURITIES" shall have the meaning set forth in the preamble.
"DEPOSITARY" shall mean the Trustee, or any other exchange agent
appointed by the Company.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2(a)
hereof.
<PAGE>
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"EXCHANGE SECURITIES" shall mean 7 3/8% Series B Senior Notes due 2006
issued by the Company under the Indenture containing terms identical in all
material respects to the Debt Securities (except that (i) interest thereon
shall accrue from the last date on which interest was paid or duly provided
for on the Debt Securities or, if no such interest has been paid, from the
date of their original issue, (ii) the transfer restrictions thereon shall
be eliminated, (iii) certain provisions relating to an increase in the
stated rate of interest thereon shall be eliminated and (iv) the legend
thereon relating to this Agreement shall be eliminated), to be offered to
Holders of Debt Securities in exchange for Debt Securities pursuant to the
Exchange Offer.
"HOLDERS" shall mean each of the Initial Purchasers, for so long as it
owns any Registrable Securities, and each of its successors, assigns and
direct and indirect transferees who shall at the time be owners of
Registrable Securities under the Indenture; provided that the term Holder
shall exclude any underwriter who purchased Registrable Securities for
distribution in an underwritten public offering pursuant to an effective
Registration Statement.
"INDENTURE" shall mean the Indenture relating to the Debt Securities
dated as of February 15, 1996 between the Company and State Street Bank and
Trust Company, as Trustee, as the same may be amended from time to time in
accordance with the terms thereof, or such other indenture as may be
reasonably acceptable to Merrill Lynch.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; PROVIDED
that whenever the consent or approval of Holders of a specified percentage
of Registrable Securities is required hereunder, Registrable Securities
held by the Company shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount; and PROVIDED, FURTHER, that whenever the consent or approval of
Holders of Registrable Securities is required hereunder with regard to
matters related to an underwritten registration or similar offering or with
regard to matters pertaining to a Registration Statement, Registrable
Securities held by Holders not participating in such underwritten
registration or similar offering, or Registrable
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<PAGE>
Securities not registered pursuant to such Registration Statement (or, at
any time prior to the filing of a Subject Registration Statement and after
the determination to file such Subject Registration Statement is made,
Registrable Securities whose Holders have not requested that such
Registrable Securities be included in such Subject Registration Statement),
as the case may be, shall be disregarded in determining whether such
consent or approval was given by the Holders of such required percentage or
amount.
"MERRILL LYNCH" shall mean Merrill Lynch, Pierce, Fenner & Smith
Incorporated, on behalf of the Initial Purchasers.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Subject Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated or deemed to be incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"PURCHASER SHELF REGISTRATION STATEMENT" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of Section
2(b)(iii) of this Agreement with respect to offers and sales of Registrable
Securities held by any or all of the Initial Purchasers (except Registrable
Securities which the Initial Purchasers have elected not to include in such
Purchaser Shelf Registration Statement or the Initial Purchasers of which
have not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
after completion of the Exchange Offer on an appropriate form under Rule
415 under the 1933 Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated or
deemed to be incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Debt Securities; PROVIDED,
HOWEVER, that any Debt Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to such Debt Securities
shall have been declared effective under the 1933 Act and such Debt
Securities shall have been disposed of pursuant to such Registration
Statement, (ii) such Debt Securities shall have been sold to the public
pursuant to Rule 144 (or any similar provision then in force, but not Rule
144A) under the 1933 Act, (iii) such Debt Securities shall have become
eligible for resale pursuant to Rule 144(k) under the 1933 Act (assuming
such securities have never been owned by
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<PAGE>
the Company or an affiliate of the Company), (iv) such Debt Securities
shall have ceased to be outstanding or (v) such Debt Securities have been
exchanged for Exchange Securities upon consummation of the Exchange Offer.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities
Dealers, Inc. ("NASD") registration and filing fees, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of one firm of
legal counsel for any underwriters and Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities),
(iii) all expenses of printing and distributing any Registration Statement,
any Prospectus and any amendments or supplements thereto, (iv) all rating
agency fees, (v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the
expenses of "cold comfort" letters required by this Agreement, (vi) the
fees and expenses of the Trustee, and any escrow agent or custodian, and
(vii) the reasonable fees and expenses of any special experts retained by
the Company in connection with any Registration Statement, but excluding
fees of counsel to the underwriters or the Holders and underwriting
discounts and commissions and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments
and supplements to any such Registration Statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated or deemed to be
incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b)(i) or
(ii) of this Agreement which covers all of the Registrable Securities
(except Registrable Securities which the Holders have elected not to
include in such Shelf Registration Statement or the Holders of which have
not complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of Section 2(b) hereof)
on an appropriate form under Rule 415 under the 1933 Act, or any similar
rule that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated or deemed to be incorporated by reference
therein.
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<PAGE>
"SUBJECT REGISTRATION STATEMENT" shall mean a Shelf Registration
Statement or a Purchaser Shelf Registration Statement or both (as the
context requires).
"TRUSTEE" shall mean the trustee with respect to the Debt Securities
under the Indenture.
All references herein to information which is "included" or "contained" in a
Registration Statement or Prospectus, and all references of like import, shall
include the information (including financial statements) incorporated or deemed
to be incorporated by reference therein, and all references herein to amendments
or supplements to a Registration Statement or Prospectus shall include any
documents filed by the Company under the 1934 Act which is deemed to be
incorporated by reference therein.
2. REGISTRATION UNDER THE 1933 ACT.
(a) EXCHANGE OFFER REGISTRATION. To the extent not prohibited by law
(including, without limitation, any applicable interpretation of the staff of
the SEC), the Company shall use its reasonable efforts (A) to file within 60
days after the Closing Date an Exchange Offer Registration Statement covering
the offer by the Company to the Holders to exchange all of the Registrable
Securities (except Registrable Securities held by an Initial Purchaser and
acquired directly from the Company if such Initial Purchaser is not permitted,
in the reasonable opinion of counsel to the Initial Purchasers, pursuant to
applicable law or SEC interpretation, to participate in the Exchange Offer) for
Exchange Securities, (B) to cause such Exchange Offer Registration Statement to
be declared effective by the SEC within 150 days after the Closing Date, (C) to
cause such Registration Statement to remain effective until the closing of the
Exchange Offer and (D) to consummate the Exchange Offer within 180 days
following the Closing Date. The Exchange Securities will be issued under the
Indenture. Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Exchange Offer, it being the objective
of such Exchange Offer to enable each Holder (other than Participating Broker-
Dealers (as defined in Section 3(f)) and broker-dealers who purchased Debt
Securities directly from the Company to resell pursuant to Rule 144A or any
other available exemption under the 1933 Act) eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder is not
an affiliate of the Company, acquires the Exchange Securities in the ordinary
course of such Holder's business and has no arrangements or understandings with
any person to participate in the distribution (within the meaning of the 1933
Act) of Exchange Securities) to trade such Exchange Securities from and after
their receipt without any limitations or restrictions under the 1933 Act and
without material restrictions under the securities laws of a substantial
proportion of the several states of the United States.
In connection with the Exchange Offer, the Company shall:
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<PAGE>
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days after the
date notice thereof is mailed to the Holders (or longer if required by
applicable law);
(iii) use the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Registrable Securities at
any time prior to the close of business, New York City time, on the last
business day on which the Exchange Offer shall remain open, by sending to
the institution specified in the notice, a telegram, facsimile transmission
or letter setting forth the name of such Holder, the principal amount of
Registrable Securities delivered for exchange, and a statement that such
Holder is withdrawing his election to have such Debt Securities exchanged;
and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange Registrable Securities duly tendered and not
validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities equal in
amount to the Registrable Securities of such Holder so accepted for
exchange.
Interest on each Exchange Security will accrue from the last date on
which interest was paid or duly provided for on the Registrable Securities
surrendered in exchange therefor or, if no interest has been paid on the
Registrable Securities, from the date of their original issue. The Exchange
Offer shall not be subject to any conditions, other than (i) that the Exchange
Offer, or the making of any exchange by a Holder, does not violate applicable
law or any applicable interpretation of the Staff of the SEC, (ii) that no
action or proceeding shall have been instituted or threatened in any court or by
or before any governmental agency or body with respect to the Exchange Offer,
(iii) that there shall not have been adopted or enacted any law, statute, rule
or regulation, (iv) that there shall not have been declared by United States
federal or California or New York state authorities a banking moratorium, (v)
that
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<PAGE>
trading on the New York Stock Exchange or generally in the United States over-
the-counter market shall not have been suspended by order of the SEC or any
other governmental authority and (vi) such other conditions as may be reasonably
acceptable to Merrill Lynch, in each of clauses (ii) through (v), which, in the
Company's judgment, would reasonably be expected to impair the ability of the
Company to proceed with the Exchange Offer. In addition, each Holder of
Registrable Securities (other than Participating Broker-Dealers (as defined))
who wishes to exchange such Registrable Securities for Exchange Securities in
the Exchange Offer will be required to represent that (i) it is not an affiliate
of the Company, (ii) any Exchange Securities to be received by it were acquired
in the ordinary course of business and (iii) it has no arrangement with any
person to participate in the distribution (within the meaning of the 1933 Act)
of the Exchange Securities. Each Participating Broker-Dealer shall be required
to make such representations as, in the reasonable judgment of the Company, may
be necessary under applicable SEC rules, regulations or interpretations or
customary in connection with similar exchange offers. Each Holder (including
Participating Broker-Dealers) shall be required to make such other
representations as may be reasonably necessary under applicable SEC rules,
regulations or interpretations to render the use of Form S-4 or another
appropriate form under the 1933 Act available and will be required to agree to
comply with their agreements and covenants set forth in this Agreement. The
Exchange Offer shall be subject to the further condition that no stop order
shall have been issued by the SEC or any state securities authority suspending
the effectiveness of the Exchange Offer Registration Statement and no
proceedings shall have been initiated or, to the knowledge of the Company,
threatened for that purpose. To the extent permitted by law, the Company shall,
upon request of the Initial Purchasers, inform the Initial Purchasers of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right to, and, if requested by the Company,
shall, contact such Holders and otherwise facilitate the tender of Registrable
Securities in the Exchange Offer.
For greater clarity, the Company's obligation to use its reasonable
efforts to make the Exchange Offer hereunder terminates at the close of business
on the 180th day following the Closing Date.
(b) SHELF REGISTRATION. (i) If, because of any change in law or
applicable interpretations thereof by the staff of the SEC, the Company is not
permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof,
or (ii) if for any other reason the Exchange Offer Registration Statement is not
declared effective within 150 days after the Closing Date, or (iii) upon the
request of the Initial Purchasers (but only with respect to any Registrable
Securities which the Initial Purchasers acquired directly from the Company)
following the consummation of the Exchange Offer if any of the Initial
Purchasers shall hold Registrable Securities which it acquired directly from the
Company and if such Initial Purchaser is not permitted, in the reasonable
opinion of counsel to the Initial Purchasers, pursuant to applicable law or
applicable interpretation of the staff of the SEC to participate in the Exchange
Offer, the Company shall, at its cost (in the case of (i) and (ii) above) or at
the cost of the Initial Purchasers (in the case of (iii) above, which cost the
Initial Purchasers hereby agree to pay, unless the Company is required by clause
(i) or (ii) above to file a Shelf
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<PAGE>
Registration Statement and Purchaser Shelf Registration Statement in a combined
Registration Statement with the Shelf Registration Statement):
(A) in the event clause (i) or (ii) is applicable, as promptly as
practicable, file with the SEC a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities (other than Registrable
Securities owned by Holders who have elected not to include such
Registrable Securities in such Shelf Registration Statement or who have not
complied with their obligations under the penultimate paragraph of
Section 3 hereof or under the penultimate sentence of this Section 2(b)) by
the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders of such Registrable Securities
and set forth in such Shelf Registration Statement, and use its reasonable
efforts to cause such Shelf Registration Statement to be declared effective
by the SEC by the 180th day after the Closing Date. In the event that the
Company is required to file a Purchaser Shelf Registration Statement upon
the request of the Initial Purchasers pursuant to clause (iii) above, the
Company shall use its reasonable efforts (unless clauses (i) or (ii) above
are applicable) to file and have declared effective by the SEC an Exchange
Offer Registration Statement pursuant to Section 2(a) with respect to all
Registrable Securities (other than Registrable Securities acquired directly
from the Company and held by the Initial Purchasers) and use its reasonable
efforts to file, promptly after any such request from the Initial
Purchasers, and have declared effective, a Purchaser Shelf Registration
Statement (which may be a combined Registration Statement with the Exchange
Offer Registration Statement or, if clause (i) or (ii) above is applicable,
a combined Registration Statement with the Shelf Registration Statement);
(B) use its reasonable efforts to keep the relevant Subject
Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of
three years from the date a Shelf Registration Statement is declared
effective by the SEC (or six months from the date a Purchaser Shelf
Registration Statement is declared effective) or in each case such shorter
period which will terminate when all of the Registrable Securities covered
by the relevant Subject Registration Statement have been sold pursuant to
such Subject Registration Statement or otherwise are no longer Registrable
Securities; and
(C) notwithstanding any other provisions hereof, use its reasonable
efforts to ensure that (i) any Subject Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Subject Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any Subject
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact
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<PAGE>
necessary in order to make the statements, in light of the circumstances
under which they were made, not misleading.
To the extent permitted by law, the Company further agrees, if
necessary, to supplement or amend the Shelf Registration Statement (if
reasonably requested by one firm of legal counsel selected by the Majority
Holders) or the Purchaser Shelf Registration Statement (if reasonably requested
by the Initial Purchasers), as the case may be, with respect to information
relating to the Holders or the Initial Purchasers, respectively, and otherwise
as required by Section 3(b) below, to use all reasonable efforts to cause any
such amendment to become effective and such Subject Registration Statement to
become usable as soon as thereafter practicable and to furnish to the Holders of
Registrable Securities registered thereby or the relevant Initial Purchasers, as
the case may be, copies of any such supplement or amendment promptly after its
being used or filed with the SEC. Anything herein to the contrary
notwithstanding, the Company shall not be required to (x) permit or effect more
than one underwritten offering of Registrable Securities pursuant to the Shelf
Registration Statement, (y) permit or effect any underwritten offerings under
the Purchaser Shelf Registration Statement or (z) permit or effect any offerings
through sales agents, distributors or other similar offerings in respect of any
Registration Statement. The Company may require, as a condition to including
the Registrable Securities of any Holder in any Subject Registration Statement,
that such Holder shall have furnished to the Company a written agreement to the
effect that such Holder agrees to comply with and be bound by the provisions of
this Registration Rights Agreement. For further clarity, the Company shall have
no obligation to keep the Shelf Registration Statement effective after
consummation of the Exchange Offer, and the Company's obligation to use its
reasonable efforts to file a Shelf Registration Statement and to keep such Shelf
Registration Statement effective shall immediately terminate upon effectiveness
of the Exchange Offer Registration Statement (regardless of when such
effectiveness shall occur).
(c) EXPENSES. The Company (i) shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) or 2(b), except that
the Initial Purchasers shall pay all Registration Expenses in connection with
any Purchaser Shelf Registration Statement pursuant to which only Registrable
Securities which they acquired directly from the Company are registered for
resale, and (ii) in the case of the Shelf Registration Statement, will reimburse
the Holders for the reasonable fees and disbursements of one firm of legal
counsel (reasonably satisfactory to the Company) designated in writing by the
Majority Holders to act as counsel for the Holders of the Registrable Securities
in connection therewith (including any Initial Purchasers whose Registrable
Securities are registered for resale pursuant to such Shelf Registration
Statement). Each Holder (including each Initial Purchaser) shall pay all
expenses of its counsel other than as set forth in the preceding sentence,
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Registrable Securities pursuant to any
Subject Registration Statement or the exchange of its Registrable Securities
pursuant to any Exchange Offer Registration Statement. Notwithstanding anything
in this Agreement to the contrary, the Company shall not be required to pay the
fees and disbursements of legal counsel for any Holders (including Initial
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<PAGE>
Purchasers) except (A) as provided in clause (ii) of the first sentence of this
paragraph, (B) to the extent such fees and disbursements constitute Registration
Expenses which the Company is required to pay pursuant to the other provisions
of this Agreement and (C) to the extent required by Section 5 hereof.
(d) EFFECTIVE REGISTRATION STATEMENT. (i) The Company will be deemed
not to have used its reasonable efforts to cause any Subject Registration
Statement to remain effective during the requisite period if the Company
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period unless (A) such action is, in the
reasonable judgment of the Company, required by applicable law (including,
without limitation, any interpretation of the SEC) or (B) such action is taken
by the Company in good faith and for valid business reasons (not including
avoidance of the Company's obligations hereunder), including the acquisition or
divestiture of assets, so long as the Company promptly complies with the
requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to Section 2(a)
hereof or a Subject Registration Statement pursuant to Section 2(b) hereof will
not be deemed to have become effective unless it has been declared effective by
the SEC.
(e) INCREASE IN INTEREST RATE. In the event that (i) the Exchange
Offer Registration Statement is not filed with the SEC on or prior to the 60th
calendar day after the Closing Date, (ii) the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 150th calendar
day after the Closing Date or (iii) the Exchange Offer is not consummated or a
Shelf Registration Statement is not declared effective by the SEC on or prior to
the 180th calendar day after the Closing Date, the interest rate borne by the
Debt Securities shall be increased by 0.50% per annum following such 60th day in
the case of clause (i) above, such 150th day in the case of clause (ii) above,
or such 180th day in the case of clause (iii) above; PROVIDED that the aggregate
amount of any such increase in such interest rate will in no event exceed 0.50%
per annum; and PROVIDED, FURTHER that if the Exchange Offer Registration
Statement is not declared effective by the SEC on or prior to the 150th day
following the Closing Date, then Debt Securities owned by Persons who do not
comply in all material respects with their obligations under the penultimate
paragraph of Section 3 will not be entitled to any such increase in the interest
rate for any day after the 180th day following the Closing Date. Upon (x) the
filing of the Exchange Offer Registration Statement after the 60th day described
in clause (i) above, (y) the effectiveness of the Exchange Offer Registration
Statement after the 150th day described in clause (ii) above or (z) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 180th day described in clause (iii)
above, the interest rate borne by the Debt Securities from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate (subject to any increase required by any other
provisions of the Debt Securities).
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<PAGE>
(f) LIQUIDATED DAMAGES/SPECIFIC ENFORCEMENT. With respect to any
failure by the Company to comply with its obligations under Section 2(a) and
Section 2(b) hereof that results in an increase in the interest rate borne by
the Debt Securities pursuant to the terms hereof, the parties hereto agree that
such additional interest shall constitute liquidated damages in respect of such
failure and the Initial Purchasers and the Holders shall have no other remedy
with respect thereto other than to receive such additional interest. The
Company acknowledges that with respect to any other failure by the Company to
comply with its obligations under Section 2(a) and Section 2(b) hereof material
irreparable injury to the Initial Purchasers or the Holders may result, for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may, to the extent permitted by
law, obtain such relief as may be required to specifically enforce the Company's
obligations under Section 2(a) and Section 2(b) hereof.
3. REGISTRATION PROCEDURES. In connection with the obligations of
the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, but only so long as the Company shall have an obligation
under this Agreement to keep a Registration Statement effective, the Company
shall:
(a) use its reasonable efforts to prepare and file with the SEC a
Registration Statement, within the relevant time period specified in Section 2,
on the appropriate form under the 1933 Act, which form (i) shall be selected by
the Company, (ii) shall, in the case of a Shelf Registration, be available for
the sale of the Registrable Securities by the selling Holders thereof and (iii)
shall comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith, and use its reasonable efforts to
cause such Registration Statement to become effective and use its reasonable
efforts to cause such Registration Statement to remain effective in accordance
with Section 2 hereof;
(b) to the extent permitted by law, use its reasonable efforts to (i)
prepare and file with the SEC such amendments and post-effective amendments to
each Registration Statement as may be necessary under applicable law to keep
such Registration Statement effective for the applicable period, (ii) cause each
Prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed (if required) pursuant to Rule 424 under the 1933 Act,
and (iii) comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify a single firm of
legal counsel for the Holders of Registrable Securities (including any Initial
Purchasers) and Merrill Lynch, at least five days prior to filing, that the
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising Merrill Lynch that the distribution of Registrable Securities
will be made in accordance with the method elected by the Majority
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<PAGE>
Holders; and (ii) furnish to each Holder of Registrable Securities registered
under the Shelf Registration Statement, to a single firm of legal counsel for
the Holders (including the Initial Purchasers) and to the managing underwriters
of an underwritten offering of Registrable Securities, if any, and their
counsel, without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and documents
incorporated by reference therein as such Holder, counsel or underwriters may
reasonably request and, if the Holder so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) subject to Section 3(k) and
the last paragraph of Section 3, hereby consent to the use of the Prospectus or
any amendment or supplement thereto by each of the selling Holders of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto but only during the period of time that the Company is required to keep
the Shelf Registration Statement effective pursuant to this Agreement;
(d) use its reasonable efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions in the United States as the Majority Holders of Registrable
Securities covered by a Registration Statement and the managing underwriter of
an underwritten offering of Registrable Securities shall reasonably request at
least ten days prior to the time the applicable Registration Statement is
declared effective by the SEC, to cooperate with the Holders in connection with
any filings required to be made with the NASD, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder pursuant to such Registration Statement;
PROVIDED, HOWEVER, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d) or (ii)
take any action that would subject it to general service of process or taxation
in any such jurisdiction if it is not then so subject;
(e) in the case of a Subject Registration Statement, notify a single
firm of legal counsel for the Holders of Registrable Securities registered
thereby (including any Initial Purchasers) and Merrill Lynch promptly and, if
requested by such counsel or Merrill Lynch, confirm such advice in writing
promptly (by notice to such counsel or to Merrill Lynch) (i) when such
Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or any state
securities authority for post-effective amendments and supplements to such
Registration Statement and the related Prospectus or for additional information
after such Registration Statement has become effective, (iii) of the issuance by
the SEC or any state securities authority of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iv) if, between the effective date of such
Registration Statement and the closing of any sale of Registrable Securities
covered thereby pursuant to an underwriting agreement to which the Company is a
party, the representations and warranties of the Company contained in such
underwriting agreement cease to be true and correct in all material respects,
(v) of the receipt by an appropriate officer or employee of the Company of
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<PAGE>
any notification with respect to the suspension of the qualification of the
Registrable Securities covered by such Registration Statement for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose
and (vi) upon an appropriate officer or employee of the Company becoming aware
thereof, of the happening of any event or the discovery of any facts during the
period such Registration Statement is effective which (A) makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or (B) causes such Registration Statement or the related
Prospectus to omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by Participating Broker-Dealers (as defined below)
who have exchanged their Registrable Securities for Exchange Securities for
the resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who notifies the Company in writing that it desires to
participate in the Exchange Offer, without charge, as many copies of each
Prospectus included in the Exchange Offer Registration Statement, including
any preliminary prospectus, and any amendment or supplement thereto, as
such broker-dealer may reasonably request, (iii) include in the Exchange
Offer Registration Statement a statement that any broker-dealer who holds
Registrable Securities acquired for its own account as a result of market-
making activities or other trading activities (a "Participating Broker-
Dealer"), and who receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer, may be a statutory underwriter and must
deliver a prospectus meeting the requirements of the 1933 Act in connection
with any resale of such Exchange Securities, (iv) subject to Section 3(k)
and the last paragraph of Section 3, hereby consent to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto by any Participating Broker-Dealer in
connection with the sale or transfer of the Exchange Securities covered by
the Prospectus or any amendment or supplement thereto for a period ending
90 days following consummation of the Exchange Offer or, if earlier, when
the Participating Broker-Dealer has given notice to the Company that all
Exchange Securities received by such Participating Broker-Dealer in
exchange for Registrable Securities acquired for their own account as a
result of market-making or other trading activities have been disposed of
by such Participating Broker-Dealer, and (v) include in the transmittal
letter or similar documentation to be executed by an exchange offeree in
order to participate in the Exchange Offer a provision to substantially the
following effect (or such similar provision as is reasonably acceptable to
counsel for the Initial Purchasers and as, in the reasonable opinion of the
Company, may at the time be required by applicable law or SEC
interpretation):
"If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a
distribution of Exchange Securities. If the undersigned is a broker-
dealer that will receive Exchange
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<PAGE>
Securities for its own account in exchange for Registrable Securities,
it represents that the Registrable Securities to be exchanged for
Exchange Securities were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities pursuant to the
Exchange Offer; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act"; and
(B) to the extent any Participating Broker-Dealer participates in the
Exchange Offer, the Company shall use its reasonable efforts to cause to be
delivered at the request of an entity representing the Participating
Broker-Dealers (which entity shall be Merrill Lynch, Pierce, Fenner & Smith
Incorporated or another Initial Purchaser) only one, if any, "cold comfort"
letter with respect to the Prospectus in the Exchange Offer Registration
Statement in the form existing on the last date for which exchanges are
accepted pursuant to the Exchange Offer; and
(C) to the extent any Participating Broker-Dealer participates in the
Exchange Offer and notifies the Company or causes the Company to be
notified in writing that it is a Participating Broker-Dealer, the Company
shall use its reasonable efforts to maintain the effectiveness of the
Exchange Offer Registration Statement for a period of 90 days following the
last date on which exchanges are accepted pursuant to the Exchange Offer,
or, if earlier, when the Participating Broker-Dealers have given notice to
the Company that all Exchange Securities received by Participating Broker-
Dealers in exchange for Registrable Securities acquired for their own
account as a result of market-making or other trading activities have been
disposed of by such Participating Broker-Dealers; and
(D) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement as would
otherwise be contemplated by Section 3(b), or take any other action as a
result of this Section 3(f), for a period exceeding 90 days after the last
date for which exchanges are accepted pursuant to the Exchange Offer (or
such earlier date referred to in Paragraph (C) above) and Participating
Broker-Dealers shall not be authorized by the Company to, and shall not,
deliver such Prospectus after such period in connection with resales
contemplated by this Section 3 or otherwise;
it being understood that, notwithstanding anything in this Agreement to the
contrary, the Company shall not be required to comply with any provision of this
Section 3(f) or any other provision of this Agreement relating to the
distribution of Exchange Securities by Participating Broker-Dealers, to the
extent that the Company reasonably concludes (with the consent of Merrill Lynch
not to be unreasonably withheld) that compliance with such provision is no
longer required by applicable law or interpretation of the staff of the SEC;
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<PAGE>
(g)(A) in the case of an Exchange Offer, furnish one firm of legal
counsel for the Initial Purchasers and (B) in the case of a Shelf
Registration, furnish one firm of legal counsel for the Holders of
Registrable Securities covered thereby copies of any request received by or
on behalf of the Company, from the SEC or any state securities authority
for amendments or supplements to the relevant Registration Statement and
Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement as soon as
practicable and provide prompt notice to one firm of legal counsel for the
Holders of the withdrawal of any such order;
(i) upon their request, in the case of a Shelf Registration, furnish
to each Holder of Registrable Securities registered thereby, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legend (except any customary legend borne by securities
held through The Depository Trust Company or any similar depository), and cause
such Registrable Securities to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the selling Holders
or the underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon an appropriate officer
or employee of the Company becoming aware of the occurrence of any event or the
discovery of any facts, each as contemplated by Section 3(e)(vi) hereof, use its
reasonable efforts to prepare a supplement or post-effective amendment to the
relevant Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain at the time of such delivery any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company agrees to notify each Holder of Registrable
Securities registered under the relevant Subject Registration Statement to
suspend use of the Prospectus as promptly as practicable after an appropriate
officer or employee of the Company becomes aware of the occurrence of such an
event, and each Holder of Registrable Securities registered under the relevant
Subject Registration Statement hereby agrees to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct such
misstatement or omission or has advised such Holders that use of such Prospectus
may be resumed. At such time as such public disclosure is otherwise made and
the relevant Subject Registration Statement has been appropriately amended or
supplemented or the Company determines that such disclosure is not necessary, in
each case to correct any misstatement of a material fact or to include any
omitted material fact,
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<PAGE>
or the Company otherwise determines that use of such Prospectus may be resumed,
the Company agrees promptly to notify each Holder of Registrable Securities
registered under the relevant Subject Registration Statement of such
determination and (if applicable) to furnish each such Holder such numbers of
copies of the Prospectus, as amended or supplemented, as such Holder may
reasonably request;
(l) obtain a CUSIP number for all Exchange Securities, or Registrable
Securities sold pursuant to a Shelf Registration Statement, as the case may be,
not later than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities or the Registrable
Securities sold pursuant to a Shelf Registration Statement, as the case may be,
in a form eligible for deposit with the Depository Trust Company (PROVIDED that
the Company shall not be required to provide for any Exchange Securities or
Registrable Securities sold pursuant to a Shelf Registration Statement to be so-
called "book-entry only" securities);
(m) unless the Indenture, as it relates to the Exchange Securities or
the Registrable Securities, as the case may be, has already been so qualified,
use its reasonable efforts to (i) cause the Indenture to be qualified under the
Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as the case
may be, (ii) cooperate with the Trustee and the Holders to effect such changes
to the Indenture, if any, as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and (iii) execute, and uses
its reasonable efforts to cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(n) in the case of a Shelf Registration, take all customary and
appropriate actions (including those reasonably requested by the Majority
Holders) in order to expedite or facilitate the disposition of the Registrable
Securities registered thereby, PROVIDED that the Company shall not be required
to (A) enter into (x) more than one underwriting agreement (the "Underwriting
Agreement") with respect to Registrable Securities registered under the Shelf
Registration Statement or (y) any underwriting agreement with respect to the
sale of any Registrable Securities pursuant to a Purchaser Shelf Registration
Statement or (B) enter into any sales agency agreements, distribution agreements
or other similar agreements whatsoever with respect to the Registrable
Securities. The Company agrees that it will in good faith negotiate the terms
of any such Underwriting Agreement, which shall be in form and scope as is
customary for similar offerings of debt securities with similar credit ratings
(including, without limitation, representations and warranties to the
underwriters) and shall otherwise be reasonable satisfactory to the Company and
the managing underwriters; and:
(i) with regard to not more than one underwritten offering pursuant
to the Underwriting Agreement (opinions of counsel that are required to be
filed as Exhibit 5 to any registration statement being specifically
excluded from this limitation), if requested by the managing underwriters,
obtain opinions of counsel to the Company
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<PAGE>
(which counsel shall be reasonably satisfactory to the managing
underwriters) addressed to such underwriters, covering the matters
customarily covered in opinions requested in sales of securities or
underwritten offerings and in substantially the form specified in the
Underwriting Agreement; PROVIDED, HOWEVER, that all of such opinions shall
be dated as of a single date and no updates thereof shall be required; and
PROVIDED, FURTHER, that except as set forth in this paragraph (i), the
Company shall have no obligation to deliver any legal opinions (excluding
Exhibit 5 opinions) under or in connection with this Agreement;
(ii) with regard to not more than one underwritten offering pursuant
to the Underwriting Agreement, if requested by the managing underwriters,
obtain a single "cold comfort" letter and a single update thereto not later
than two weeks after the date of the original letter (or if not available
under applicable accounting pronouncements or standards, a single
"procedures" letter and a single update thereto) from the Company's
independent certified public accountants addressed to the underwriters
named in the Underwriting Agreement and use reasonable efforts to have such
letter addressed to the selling Holders of Registrable Securities (PROVIDED
that such letter need not be addressed to any Holders to whom, in the
reasonable opinion of the Company's independent certified public
accountants, addressing such letter is not permissible under applicable
accounting standards), such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" (or "procedures")
letters to underwriters in connection with similar underwritten offerings;
PROVIDED, HOWEVER, that except as set forth in this paragraph (ii), the
Company shall have no obligation to delivery any "cold comfort" or
"procedures" letters or any updates thereto under or in connection with
this Agreement; and
(iii) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar underwritten
offerings.
Notwithstanding anything herein to the contrary, the Company shall have no
obligation to enter into any underwriting agreement or permit an underwritten
offering of Registrable Securities unless a request therefor shall have been
received from the Majority Holders. In the case of such a request for an
underwritten offering, the Company shall provide written notice to the Holders
of all Registrable Securities of such underwritten offering at least 30 days
prior to the filing of a prospectus supplement for such underwritten offering.
Such notice shall (x) offer each such Holder the right to participate in such
underwritten offering (but may indicate that whether or not all Registrable
Securities are included will be at the discretion of the underwriters), (y)
specify a date, which shall be no earlier than 10 days following the date of
such notice, by which such Holder must inform the Company of its intent to
participate in such underwritten offering and (z) include the instructions such
Holder must follow in order to participate in such underwritten offering;
(o) in the case of a Shelf Registration, and to the extent customary
in connection with a "due diligence" investigation for an offering of debt
securities with a similar
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<PAGE>
credit rating to that of the Registrable Securities, make available for
inspection by representatives appointed by the Majority Holders and any
underwriters participating in any disposition pursuant to a Shelf Registration
Statement and one firm of legal counsel retained for all Holders participating
in such Shelf Registration, and one firm of legal counsel to the underwriters,
if any, all financial and other records, pertinent corporate documents and
properties of the Company reasonably requested by any such persons, and cause
the respective officers, employees, and any other agents of the Company to
supply all information reasonably requested by any such representative,
underwriters or counsel in connection with the Shelf Registration Statement;
PROVIDED that, if any such records, documents or other information relates to
pending or proposed acquisitions or dispositions, or otherwise relates to
matters reasonably considered by the Company to constitute sensitive or
proprietary information, the Company need not provide such records, documents or
information unless the foregoing parties enter into a confidentiality agreement
in customary form and reasonably acceptable to such parties and the Company;
(p) (i) a reasonable time prior to the filing of any Exchange Offer
Registration Statement, any Prospectus forming a part thereof, any amendment to
an Exchange Offer Registration Statement or amendment or supplement to such
Prospectus, provide copies of such document to the Initial Purchasers, and make
such changes in any such document prior to the filing thereof as Merrill Lynch
or one firm of legal counsel to the Initial Purchasers may reasonably request;
(ii) in the case of a Shelf Registration, a reasonable time prior to filing any
Shelf Registration Statement, any Prospectus forming a part thereof, any
amendment to such Shelf Registration Statement or amendment or supplement to
such Prospectus, provide copies of such document to Merrill Lynch, one firm of
legal counsel appointed by the Majority Holders to represent the Holders
participating in such Shelf Registration, the managing underwriters of an
underwritten offering of Registrable Securities, if any, and their counsel, and
make such changes in any such document prior the filing thereof as Merrill
Lynch, such one firm of legal counsel for the Holders, such managing
underwriters or their counsel may reasonably request; and (iii) cause the
representatives of the Company to be available for discussion of such document
as shall be reasonably requested by Merrill Lynch, one firm of legal counsel to
the Holders, the managing underwriters and their counsel and shall not at any
time make any filing of such document of which Merrill Lynch, one firm of legal
counsel to the Holders, the managing underwriters and their counsel shall not
have previously been advised and furnished a copy or to which Merrill Lynch, one
firm of legal counsel to the Holders, the managing underwriters and their
counsel shall reasonably object; PROVIDED that the provisions of this paragraph
(p) shall not apply to any document filed by the Company pursuant to the 1934
Act which is incorporated or deemed to be incorporated by reference in any
Registration Statement or Prospectus;
(q) use its reasonable efforts to cause the Exchange Securities, if
applicable, and, in the event of a Shelf Registration, the Debt Securities to be
rated with not more than two rating agencies selected by the Company, if so
requested by the Majority Holders or by the managing underwriters of an
underwritten offering of Registrable Securities, if any, unless the
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Exchange Securities or the Registrable Securities, as the case may be, are
already so rated or unless the Company has obtained such ratings for its long-
term debt securities generally;
(r) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the 1933
Act and Rule 158 thereunder; PROVIDED that the Company's obligations under this
paragraph (r) shall be satisfied by the filing of its quarterly and annual
reports on Forms 10-K and 10-Q; and
(s) cooperate and assist in any filings required to be made with the
NASD and in the performance of any due diligence investigation by any managing
underwriters and their counsel.
In the case of a Subject Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) (i) require
each Holder of Registrable Securities to furnish to the Company such information
regarding such Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing and such other information as, in the reasonable opinion of the
Company, is required for inclusion in the Subject Registration Statement (which
requests may be given to a single firm of legal counsel for the Holders), and
(ii) further require each Holder of Registrable Securities, through one firm of
legal counsel on behalf of all such Holders, to furnish to the Company comments
on the Subject Registration Statement and the Prospectus included therein or any
amendment or supplement to any of the foregoing not later than such times as the
Company reasonably may request.
In the case of a Subject Registration Statement, each Holder agrees
and, in the case of the Exchange Offer Registration Statement, each
Participating Broker-Dealer agrees that, upon receipt of any notice from the
Company of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(ii)-(vi) or Section 3(k) hereof (it being
understood and agreed that, for purposes of this paragraph, all references in
Sections 3(e)(ii)-(vi) and Section 3(k) to a "Subject Registration Statement", a
"Shelf Registration Statement" or a "Registration Statement" shall be deemed to
mean and include the Shelf Registration Statement, the Purchaser Shelf
Registration Statement or the Exchange Offer Registration Statement or all or
any combination thereof (as the context requires), MUTATIS MUTANDIS), such
Holder or Participating Broker-Dealer, as the case may be, will forthwith
discontinue disposition of Registrable Securities pursuant to such Registration
Statement and discontinue use of the Prospectus included therein until such
Holder's or Participating Broker-Dealer's receipt, as the case may be, of (A)
copies of the supplemented or amended Prospectus contemplated by Section 3(k)
hereof or (B) notice from the Company that the sale of the Registrable
Securities may be resumed, and, if so directed by the Company, such Holder or
Participating Broker-Dealer, as the case may be, will deliver to the Company (at
its expense) all copies in its possession, other than permanent file copies then
in its possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice. If
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<PAGE>
the Company shall give any such notice to suspend the disposition of Registrable
Securities pursuant to a Registration Statement as a result of the happening of
any event or the discovery of any facts, each of the kind described in Section
3(e)(vi) or 3(k) hereof, the Company shall be deemed to have used its reasonable
efforts to keep such Registration Statement effective during such period of
suspension, PROVIDED that the Company shall use its reasonable efforts to file
and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to such Registration Statement or the related Prospectus
and shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and including
the date when the Holders shall have received copies of the supplemented or
amended Prospectus necessary to resume such dispositions or the date on which
the Company has given notice that the sale of Registrable Securities may be
resumed, as the case may be. Each Holder of Registrable Securities hereby
agrees that it will at all times use the then most current preliminary
prospectus or Prospectus (as the case may be), as then amended or supplemented,
which has been provided to it by the Company in connection with the resale or
transfer of any Registrable Securities pursuant to a Registration Statement or
Prospectus.
4. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by the Shelf Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Majority Holders and shall
be reasonably acceptable to the Company.
No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder and each Person,
if any, who controls any of such parties within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Exchange Securities
or Registrable Securities were registered under the 1933 Act, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom
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<PAGE>
of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including
(subject to Section 5(c) below) the reasonable fees and disbursements of
counsel chosen by Merrill Lynch, Pierce, Fenner & Smith Incorporated or, in
the event that Merrill Lynch, Pierce, Fenner & Smith Incorporated is not an
indemnified party, by a majority of the indemnified parties), reasonably
incurred in investigating, preparing or defending against any litigation,
or investigation or proceeding by any court or governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
of this Section 5(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Initial Purchaser, any Holder or any underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); and PROVIDED, FURTHER, that this indemnity
agreement with respect to any Prospectus shall not inure to the benefit of any
Initial Purchaser or Holder from whom the person asserting any such losses,
claims, damages or liabilities purchased Registrable Securities or Exchange
Securities (or any person who controls such Initial Purchaser or Holder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) if a
copy of the Prospectus (as then amended or supplemented and furnished by the
Company to such Initial Purchaser or Holder, as the case may be) was not sent or
given by or on behalf of such Initial Purchaser or Holder, as the case may be,
to such person, if such is required by law, at or prior to the sale of such
Registrable Securities or Exchange Securities and if the Prospectus (as to
amended or supplemented) would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) In the case of a Shelf Registration, each Holder agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Initial Purchaser, each underwriter who participates in an offering of
Registrable Securities and the other Holders and each of their respective
directors and officers (including each officer of the Company who signed the
Registration Statement in question) and each Person, if any, who controls the
Company, any Initial Purchaser, any underwriter or any other Holder within the
meaning of Section 15 of the
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<PAGE>
1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims, damages and expenses described in the indemnity
contained in Section 5(a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of such Holder expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that no such Holder shall be liable for any
claims hereunder in excess of the amount of net proceeds received by such
Holder from the sale of Registrable Securities pursuant to such Registration
Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have other than on account of this indemnity agreement or the contribution
agreement set forth in Section 5(d) below. An indemnifying party may
participate at its own expense in the defense of such action. In no event shall
the indemnifying party or parties be liable for the fees and expenses of more
than one legal counsel (which shall be selected by Merrill Lynch, Pierce, Fenner
& Smith Incorporated or, in the event that Merrill Lynch, Pierce, Fenner & Smith
Incorporated is not an indemnified party, by a majority in number of the
indemnified parties) for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which any of the indemnity provisions set forth in this Section
5 are for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Initial
Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company, the Initial Purchasers and the
Holders, as incurred; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Initial Purchasers and Holders,
such parties shall contribute to such aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the Company on the one hand, the Initial Purchasers on another hand,
and the Holders on another hand, from the offering of the Exchange Securities or
Registrable Securities, as the case may be, included in such offering, and (ii)
the relative fault of the Company on the one hand, the Initial Purchasers on
another hand, and the Holders on another hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The Company, the Initial Purchasers and the Holders agree that
it would not be just and equitable if contribution pursuant to this Section 5
were to be determined by pro rata allocation or by any other method
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<PAGE>
of allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5, each Person, if any, who
controls an Initial Purchaser or a Holder within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Initial Purchaser or such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement in
question, and each Person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
6. MISCELLANEOUS. (a) RULE 144. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company covenants that it will file the reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder, that if it ceases to be so required to file such reports, it
will upon the request of any Holder of Registrable Securities (i) make publicly
available such information as is necessary to permit sales pursuant to Rule 144
under the 1933 Act and (ii) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
1933 Act within the limitation of the exemptions provided by (x) Rule 144 under
the 1933 Act, as such Rule may be amended from time to time or (y) any similar
rules or regulations hereafter adopted by the SEC (PROVIDED that the obligations
of the Company under any such similar rules or regulations shall not be more
burdensome in any substantial respect than those referred to in clause (x)).
Upon the request of any Holder of Registrable Securities, the Company will
deliver to such Holder a written statement as to whether it has complied with
such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered into nor
will the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; PROVIDED, HOWEVER, that to the extent any provision of this
Agreement relates to the Purchaser Shelf Registration Statement or otherwise to
the Initial Purchasers, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions thereof may be given,
by Merrill Lynch; and PROVIDED, FURTHER, that no amendment, modification,
supplement or waiver or consent to any departure from the provisions of Section
5 hereof shall be effective as against any Holder of Registrable Securities
unless consented to in writing by such Holder. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and Merrill Lynch to
the extent that any such amendment, modification,
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<PAGE>
supplement, waiver or consent is, in their reasonable judgment, necessary or
appropriate to comply with applicable law (including any interpretation of the
staff of the SEC) or any change therein and a waiver or consent to departure
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders, determined on the basis of
securities being sold rather than registered under such Registration Statement.
(d) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telecopier, or any courier providing overnight delivery (i) if to a
Holder, at its address appearing in the "Note register" (as defined in the
Indenture) or at such other address as shall have been given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 6(d), which address initially is, with respect to the Initial
Purchasers, the address care of Merrill Lynch, Pierce, Fenner & Smith
Incorporated set forth in the Purchase Agreement, and (ii) if to the Company
initially at the Company's address set forth in the Purchase Agreement, or in
each case to such other address notice of which is given in accordance with the
provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day if timely delivered
to an air courier providing overnight delivery.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; PROVIDED that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Indenture or the Offering
Memorandum dated February 26, 1996; and PROVIDED, FURTHER, that Holders of
Registrable Securities may not assign their rights under this Agreement except
in connection with the permitted transfer of Registrable Securities and then
only insofar as relates to such Registrable Securities. If any transferee of
any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement,
and such Person shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. The Holders from time to time shall
each be a third party beneficiary to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchasers, on the other hand, and
Merrill Lynch shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
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<PAGE>
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
------------------------
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SOLECTRON CORPORATION
By: /s/ Susan Wang
-----------------------------
Name: Susan Wang
Title: Senior Vice President and
Chief Financial Officer
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
HAMBRECHT & QUIST LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Andrew Burch
-------------------------
Name: Andrew Burch
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<PAGE>
EXHIBIT 4.4
[FORM OF 7-3/8% SENIOR NOTE DUE 2006, SERIES B]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLECTRON CORPORATION
7-3/8% SENIOR NOTE DUE 2006, SERIES B
No. CUSIP
---- ------------
Solectron Corporation, a corporation duly organized and validly existing
under the laws of the State of California (herein called the "Company'), which
term includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to ___________ or
registered assigns, the principal sum of _________________________________
($___________) on March 1, 2006, at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or, at the option of the holder of this Note, at the Corporate Trust Office, in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts, and to pay
interest, semi-annually on March 1 and September 1 of each year, commencing
September 1, 1996, on said principal sum at said office or agency, in like coin
or currency, at the rate per annum of 7 3/8% (the "Initial Rate") plus
Additional Interest (as defined herein), if any, from March 1 or September 1,
as the case may be, next preceding the date of this Note to which interest has
been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for, in which case from the date of
this Note, or unless no interest has been paid or duly provided for on the
Notes, in which case from February 29, 1996, until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if
the date hereof is after any February 15 or August 15, as the case may be,
and before the following March 1 or September 1, this Note shall bear
interest from such March 1 or September 1; PROVIDED, HOWEVER, that if the
Company shall default in the payment of interest due on such March 1 or
September 1, then this Note shall bear interest from the next preceding
March 1 or September 1 to which interest has been paid or duly provided for
or, if no interest has been paid or duly provided for on such Note,
from February 29, 1996. The interest payable on the Note pursuant to the
Indenture on any March 1 or September 1 will 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 record date, which shall be the February 15 or August 15
(whether or not a Business Day) next preceding such March 1 or September 1, as
provided in the Indenture, PROVIDED, HOWEVER, that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. Interest may, at the option of the Company, be paid by check mailed
to the registered address of such person on the Note register; PROVIDED,
HOWEVER, that, with respect to any holder of Notes with an aggregate principal
amount equal to or in excess of $5,000,000, at the request of such holder in
writing to the Company (who shall then furnish written notice to such effect to
the Trustee), interest on such holder's Notes shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instructions
supplied by such holder to the Trustee and paying agent (if different from the
Trustee).
Any accrued and unpaid interest (including Additional Interest) on this
Note upon the issuance of an Exchange Note in exchange for this Note shall cease
to be payable to the holder hereof but such accrued and unpaid interest
(including Additional Interest) shall be payable on the next March 1 or
September 1 to the holder of such Exchange Note on the related record date.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
under its corporate seal.
Dated: , 1996 SOLECTRON CORPORATION
-----------
By:
-------------------------------------
Vice President - Finance
Attest:
---------------------------------
Senior Vice President, Chief
Financial Officer and Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the
within-named Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
--------------------------------
Authorized Signatory
By:
--------------------------------
As Authenticating Agent (if different from Trustee)
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<PAGE>
SOLECTRON CORPORATION
7 3/8% SENIOR NOTE DUE 2006, SERIES B
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 7 3/8% Senior Notes due 2006, Series B (herein called the
"Notes"), limited to the aggregate principal amount of $150,000,000 all issued
or to be issued under and pursuant to an indenture dated as of February 15, 1996
(herein called the "Indenture"), between the Company and State Street Bank and
Trust Company as trustee (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) change the stated maturity of any Note, or reduce the rate
or change the time of payment of interest thereon, or reduce the principal
amount thereof, or impair the right of any Noteholder to institute suit for the
payment thereof, or make the principal thereof or interest thereon payable in
any coin or currency or at any place other than that provided in the Note, or
(ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. It is also provided in the Indenture
that the holders of a majority in aggregate principal amount of the Notes at the
time outstanding may on behalf of the holders of all of the Notes waive any past
default or Event of Default under the Indenture and its consequences except a
default in the payment of interest or the principal of any of the Notes. Any
such consent or waiver by the holder of this Note (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Note and any Notes which may be issued in
exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Note or such other Notes.
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 interest on this Note at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.
In the event that (a) the rating initially assigned to the Notes by the
NAIC (the "Initial Rating") is below NAIC-2 or (b) no Initial Rating has been
assigned to the Notes by September 1, 1996, then, in addition to the stated
interest at the Initial Rate the Company will permanently pay additional
interest at the rate of 0.25% per annum on the principal amount of the Notes
(the "Additional Interest"), beginning on (i) in the case of clause (a) above,
either (x) the date the Initial Rating is publicly announced or notice thereof
is received by the Company or (y) if such public announcement or notice occurs
between a record date and an interest payment date, such interest payment date
or (ii) in the case of clause (b) above, September 1, 1996 (each of the dates
described in clause (i) and (ii) an "Interest Adjustment Date"); PROVIDED,
HOWEVER, that the Company will not pay Additional Interest if the Initial Rating
is NAIC-2 or better, notwithstanding a change in the NAIC rating assigned to the
Notes subsequent to the determination of the Initial Rating or any other event;
and PROVIDED, FURTHER, that there will not be more than one adjustment for
Additional Interest. If the Interest Adjustment Date occurs during an interest
payment period, the Notes will bear interest for such interest payment period at
a rate per annum equal to the weighted average of (a) the Initial Rate and (b)
the Initial Rate plus 0.25%, which weighted average shall be calculated by
multiplying the Initial Rate, or the Initial Rate plus 0.25%, as applicable, by
the number of days such interest rate is in effect during each month of such
interest payment period, determining the sum of such products, and dividing such
sum by the number of days in such interest payment period.
All calculations pursuant to the preceding paragraph (and an other
calculations of interest on the Notes) shall be made on the basis of a 360-day
year consisting of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $ 1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.
The Notes are not subject to redemption prior to maturity.
<PAGE>
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent and
any Note registrar may deem and treat the registered holder hereof as the
absolute owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Note registrar), for the purpose of receiving
payment hereof, or on account hereof and for all other purposes, and neither the
Company nor the Trustee nor any other authenticating agent nor any paying agent
nor any Note registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.
No recourse for the payment of the principal of or interest, including
any Additional Interest, on this Note, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer or director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, an such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
-2-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------- -------
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors Act
JT TEN - as joint tenants with ----------------------------------------------
right of survivorship (State)
and not as tenants in
common
Additional abbreviations may also be used
though not in the above list.
<PAGE>
ASSIGNMENT
For value received _______________________ hereby sell(s), assign(s) and
transfers(s) unto ______________________ (Please insert name, social security or
other Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints ____________ attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated:
------------------ ---------------------------------------------
---------------------------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17 Ad-15 if Notes are to be
delivered other than to and in the name of
the registered holder.
---------------------------------------------
Signature Guarantee
<PAGE>
EXHIBIT 5.1
April 26, 1996
Solectron Corporation
777 Gibraltar Drive
Milpitas, CA 95035
RE: REGISTRATION STATEMENT ON FORM S-4 FOR SOLECTRON CORPORATION
Ladies and Gentlemen:
We have acted as corporate counsel to Solectron Corporation, a
California corporation (the "Company"), in connection with the filing by the
Company with the Securities and Exchange Commission of a registration statement
(the "Registration Statement") on Form S-4 under the Securities Act of 1933, as
amended (the "Securities Act"). The Registration Statement relates to the
proposed issuance of up $150,000,000 aggregate principal amount of the
Company's 7 3/8% Notes due 2006, Series B (the "New Notes") registered under
the Securities Act in exchange for up to $150,000,000 aggregate principal
amount of the Company's outstanding 7 3/8% Notes due 2006, Series A (the "Old
Notes"). The New Notes are issuable under an Indenture dated as of February 15,
1996 (the "Indenture") between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee").
As corporate counsel to the Company, we have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, certificates, corporate records and other instruments as we
have deemed necessary or advisable for the purpose of this opinion. In our
examination, we have assumed the authenticity of all documents submitted to us
as originals, the genuineness of all signatures thereon, the legal capacity of
natural persons executing such documents and the conformity to original
documents of all documents submitted to us as certified or photostatic copies.
Based upon the foregoing, and subject to the assumptions and
limitations set forth herein, we are of the opinion that, when the New Notes
are duly executed under the Company's corporate seal, attested, issued and
delivered by duly authorized officers of the Company and authenticated by the
Trustee, all in accordance with such Company action and the terms of the
Indenture, against surrender and cancellation of a like principal amount of Old
Notes, the New Notes will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and
other laws relating to or affecting creditors' rights generally and (ii)
general principles of equity, whether such enforcement is considered in a
proceeding in equity or at law.
<PAGE>
Solectron Corporation
April 26, 1996
Page 2
To the extent relevant to the opinions set forth above, we have
assumed that the Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Trustee
is duly qualified to engage in the activities contemplated by the Indenture and
is qualified and eligible under the terms of the Indenture to act as trustee
thereunder; that the Indenture was duly authorized, executed and delivered by
the Trustee; that the Indenture is a valid and binding obligation of the
Trustee; that the Trustee is in compliance, generally with respect to acting as
a trustee under the Indenture, with all applicable laws and regulations; and
that the Trustee has the requisite organizational and legal power and authority
to perform its obligations under the Indenture.
We express no opinion as to the enforceability of provisions of the
Indenture or the Notes which provide that the assertion or employment of any
right or remedy shall not prevent the concurrent assertion or employment of
any other right or remedy, or that every right and remedy shall be cumulative
and in addition to every other right and remedy, or that any delay or
omission to exercise any right or remedy shall not impair any other right or
remedy or constitute a waiver thereof.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and any amendments thereto.
Very truly yours,
WILSON, SONSINI, GOODRICH & ROSATI
Professional Corporation
/s/ Wilson Sonsini Goodrich & Rosati, P.C.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 12.1
SOLECTRON CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio of earnings to fixed charges)
Six Months Ended
Year Ended August 31, --------------------------
------------------------------------------------- February 28, February 29,
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes...... $16,442 $24,144 $48,613 $ 84,159 $120,494 $54,890 $83,328
Fixed charges................... 6,145 9,779 16,138 16,802 15,578 8,528 5,003
------- ------- ------- -------- -------- -------- -------
$22,587 $33,923 $64,751 $100,961 $136,072 $63,418 $88,331
------- ------- ------- -------- -------- -------- -------
------- ------- ------- -------- -------- -------- -------
Fixed Charges:
Interest portion of
annual rent expense (1)....... $ 3,966 $ 4,393 $ 5,560 $ 6,127 $ 6,027 $ 3,063 $ 3,013
Interest expense................ 2,179 5,386 10,578 10,675 9,551 5,465 1,990
------- ------- ------- -------- -------- -------- -------
$ 6,145 $ 9,779 $16,138 $ 16,802 $ 15,578 $ 8,528 $ 5,003
------- ------- ------- -------- -------- -------- -------
------- ------- ------- -------- -------- -------- -------
Earnings to fixed charges
ratio........................... 3.68 3.47 4.01 6.01 8.73 7.44 17.66(2)
</TABLE>
(1) Total annual rent expense of certain facilities in Milpitas, California,
and one third of annual rent expense for all other facilities was deemed
to be representative of the interest factor in rent expense.
(2) The ratio of earnings to fixed charges for the six months ended February
29, 1996 includes the conversion of the Company's zero-coupon convertible
subordinated notes due 2012 (principally in the fourth quarter of fiscal
year 1995), but excludes the Company's issuance of 6% Convertible
Subordinated Notes due 2006 and 7 3/8 Senior Notes due 2006, Series A
completed in February 1996.
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
The Board of Directors
Solectron Corporation
We consent to the use of our reports incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
--------------------------------------
KPMG Peat Marwick LLP
San Jose, California
April 25, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
and to the use of our report dated February 1, 1996, with respect to the
financial statements of the Custom Manufacturing Services Business of Texas
Instruments Incorporated incorporated by reference in the Registration Statement
(Form S-4) of Solectron Corporation for the registration of $150,000,000 of its
7 3/8% Senior Notes due 2006, Series B.
Dallas, Texas
April 23, 1996
/s/ Ernst & Young LLP
--------------------------------------
Ernst & Young LLP
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) __
STATE STREET BANK AND TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-1867445
(JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER
ORGANIZATION IF NOT A U.S. NATIONAL BANK) IDENTIFICATION NO.)
225 Franklin Street, Boston, Massachusetts 02110
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
---------------------
(NAME OF ISSUER)
--------------
SOLECTRON CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
(STATE) (EIN)
CALIFORNIA 94-2447045
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
(ADDRESS OF ISSUER)
777 GIBRALTAR DRIVE
MILPITAS, CA 95035
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
--------------------
(TYPE OF SECURITIES)
7 3/8% SENIOR NOTES DUE 2006
(TITLE OF INDENTURE SECURITIES)
<PAGE>
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.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 6.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. 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) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of the
obligor or any underwriter for the obligor, the trustee has relied upon
information furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, 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 Boston
and The Commonwealth of Massachusetts, on the 18TH DAY OF APRIL, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
------------------------------
E. DECKER ADAMS
VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by SOLECTRON
CORPORATION of its 7 3/8% SENIOR NOTES DUE 2006, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. Decker Adams
------------------------------
E. DECKER ADAMS
VICE PRESIDENT
DATED: APRIL 18, 1996
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business DECEMBER
31, 1995, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin. . . . . . . . . . . . . . . . . . . 1,331,827
Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,971,326
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,325,054
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 5,436,994
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,308,339
Allowance for loan and lease losses . . . . . . . . . 63,491
Loans and leases, net of unearned income and allowances . . . . . . . . . . . . . . . . 4,244,848
Assets held in trading accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,042,846
Premises and fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374,362
Other real estate owned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,223
Investments in unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 31,624
Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . 57,472
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,384
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670,058
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,558,018
------------
------------
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,880,231
Noninterest-bearing. . . . . . . . . . . . . . 4,728,115
Interest-bearing . . . . . . . . . . . . . . . 2,152,116
In foreign offices and Edge subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . 9,607,427
Noninterest-bearing. . . . . . . . . . . . . . 28,265
Interest-bearing . . . . . . . . . . . . . . . 9,579,162
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 5,913,969
Demand notes issued to the U.S. Treasury and Trading Liabilities . . . . . . . . . . . . . . . 530,406
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493,191
Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . 57,387
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620,287
------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,102,898
------------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,176
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,448
Undivided profits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,197,496
------------
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,455,120
Total liabilities and equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,558,018
------------
------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING
AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility and
Qualification which relates to matters peculiarly within the knowledge of the
obligor or any underwriter of the obligor, the trustee has relied upon the
information furnished to it by the obligor and the underwriters, and the trustee
disclaims responsibility for the accuracy or completeness of such information.
The answer to Item 2. of this statement will be amended, if necessary,
to reflect any facts which differ from those stated and which would have been
required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation duly
organized and existing under the laws of The Commonwealth of Massachusetts, 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 Boston
and The Commonwealth of Massachusetts, on the 18TH DAY OF APRIL, 1996.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. DECKER ADAMS
--------------------------------
E. DECKER ADAMS
VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by SOLECTRON
CORPORATION of its 7 3/8% SENIOR NOTES DUE 2006, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ E. DECKER ADAMS
--------------------------------
E. DECKER ADAMS
VICE PRESIDENT
DATED: APRIL 18, 1996
3
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
SOLECTRON CORPORATION
OFFER TO EXCHANGE ITS
7 3/8% SENIOR NOTES DUE 2006, SERIES B
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
7 3/8% SENIOR NOTES DUE 2006, SERIES A
PURSUANT TO THE PROSPECTUS
DATED_______________, 1996
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME ON _______, 1996 (SUCH TIME ON SUCH DATE, AND AS SUCH TIME AND DATE MAY BE
EXTENDED, THE "EXPIRATION DATE").
If you desire to accept the Exchange Offer (as defined below), this Letter
of Transmittal should be completed, signed, and submitted to:
STATE STREET BANK AND TRUST COMPANY
Exchange Agent
BY REGISTERED OR CERTIFIED MAIL: BY OVERNIGHT DELIVERY OR HAND:
- - ------------------------------------- --------------------------------------
State Street Bank and Trust Company State Street Bank and Trust Company
2 International Place, 4th Floor 2 International Place, 4th Floor
Boston, MA 02110 Boston, MA 02110
Attn: Corporate Trust Department Attn: Corporate Trust Department
(Solectron Corporation, (Solectron Corporation,
7 3/8% Senior Notes due 2006) 7 3/8% Senior Notes due 2006)
OR
BY HAND:
-------------------------------------------------
State Street Bank and Trust Company, N.A.
61 Broadway
Concourse Level
Corporate Trust Window
New York, NY 10006
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(617) 664-5610 (Massachusetts)
FACSIMILE TRANSMISSIONS:
(617) 664-5635 (Massachusetts)
(Originals of all documents sent by facsimile should be sent promptly by hand,
overnight courier or registered or certified mail.)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Notes (as
defined below) either if Old Notes are to be forwarded herewith or if tenders of
Old Notes are to be made by book-entry transfer to an account maintained by
State Street Bank and Trust Company (the "Exchange Agent") at The Depository
Trust Company ("DTC") pursuant to the procedures set forth in "The Exchange
Offer -- Procedures for Tendering Old Notes" in the Prospectus.
Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates and
all other required documents to the Exchange Agent on or prior to the Expiration
Date (as defined in the Prospectus) or who cannot complete the procedures for
book-entry transfer on a timely basis, must tender their Old Notes according to
the guaranteed delivery procedures set forth in "The Exchange Offer -Procedures
for Tendering Old Notes" in the Prospectus. See Instruction 1 hereto. DELIVERY
OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Solectron Corporation, a California
corporation (the "Company"), the aggregate principal amount of the Company's
7 3/8% Senior Notes due 2006, Series A (the "Old Notes") described in Box 1
below in exchange for a like aggregate principal amount of the Company's 7
3/8% Senior Notes due 2006, Series B (the "New Notes") which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), upon the terms and subject to the conditions set forth in the
Prospectus dated _____ __, 1996 (as the same may be amended or supplemented
from time to time, the "Prospectus"), receipt of which is acknowledged, and
in this Letter of Transmittal (which, together with the Prospectus,
constitutes the "Exchange Offer").
Subject to, and effective upon, the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to such Old Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
State Street Bank and Trust Company as the Exchange Agent (the "Exchange Agent")
as its agent and attorney-in-fact (with full knowledge that the Exchange Agent
is also acting as agent of the Company in connection with the Exchange Offer)
with respect to the tendered Old Notes, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Old Notes to the Company together with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Company, upon receipt by the Exchange Agent, as the undersigned's agent, of
the New Notes to be issued in exchange for such Old Notes, (ii) present
Certificates for such Old Notes for transfer, and to transfer the Old Notes on
the books of the Company, and (iii) receive for the account of the Company all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Notes, all in accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD
NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE
COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND
CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE OLD
NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE
UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS
DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO
COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD NOTES TENDERED HEREBY,
AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION
RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF
THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed in Box 1 below, if they are not already set
forth below, as they appear on the Certificates representing such Old Notes.
The Certificate number(s) and the Old Notes that the undersigned wishes to
tender should be indicated in the appropriate box below.
If any tendered Old Notes are not exchanged pursuant to the Exchange Offer
for any reason, or if Certificates are submitted for more Old Notes than are
tendered or accepted for exchange, Certificates for such nonexchanged or
nontendered Old Notes will be returned (or, in the case of Old Notes tendered by
book-entry transfer, such Old Notes will be credited to an account maintained at
DTC), without expense to the tendering holder, promptly following the expiration
or termination of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to any one
of the procedures described in "The Exchange Offer -- Procedures for Tendering
Old Notes" in the Prospectus and in the instructions hereto will, upon the
Company's acceptance for exchange of such tendered Old Notes, constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer. The undersigned recognizes
that, under certain circumstances set forth in the Prospectus, the Company may
not be required to accept for exchange any of the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Exchange
Instructions" below (Box 7), the undersigned hereby directs that the New Notes
be issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Old Notes, that such New Notes be credited to the account indicated
below maintained at DTC. If applicable, substitute Certificates representing
Old Notes not exchanged or not accepted for exchange will be issued to the
undersigned or, in the case of a book-entry transfer of Old Notes, will be
credited to the account indicated below maintained at DTC. Similarly, unless
otherwise indicated under "Special Delivery Instructions" (Box 8), please
deliver New Notes to the undersigned at the address shown below the
undersigned's signature.
BY TENDERING OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF THE COMPANY, (II) ANY NEW NOTES TO BE RECEIVED BY THE UNDERSIGNED
ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS, (III) THE UNDERSIGNED
HAS NO ARRANGEMENT OR UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A
DISTRIBUTION (WITHIN THE MEANING OF THE SECURITIES ACT) OF NEW NOTES TO BE
RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE UNDERSIGNED IS NOT A BROKER-
DEALER, THE UNDERSIGNED
-2-
<PAGE>
IS NOT ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE
MEANING OF THE SECURITIES ACT) OF SUCH NEW NOTES. BY TENDERING OLD NOTES
PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF TRANSMITTAL, A
HOLDER OF OLD NOTES WHICH IS A BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT
WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF
CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES,
THAT SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME) MEETING
THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH NEW
NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY DELIVERING A PROSPECTUS, SUCH
BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT IS AN "UNDERWRITER" WITHIN THE
MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION
RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN
CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN EXCHANGE FOR OLD NOTES, WHERE
SUCH OLD NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN
ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR
A PERIOD ENDING 90 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO EXTENSION UNDER
CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN
ALL SUCH NEW NOTES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER.
IN THAT REGARD, EACH BROKER-DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS
A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-
DEALER"), BY TENDERING SUCH OLD NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL,
AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE OCCURRENCE OF ANY
EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR
INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR
WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER
TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE
OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE REGISTRATION RIGHTS
AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND THE SALE OF NEW NOTES
PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED OR SUPPLEMENTED THE
PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF
THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR THE
COMPANY HAS GIVEN NOTICE THAT THE SALE OF THE NEW NOTES MAY BE RESUMED, AS THE
CASE MAY BE. IF THE COMPANY GIVES SUCH NOTICE TO SUSPEND THE SALE OF THE NEW
NOTES, IT SHALL EXTEND THE 90-DAY PERIOD REFERRED TO ABOVE DURING WHICH
PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS IN CONNECTION
WITH THE RESALE OF NEW NOTES BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND
INCLUDING THE DATE OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN
PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR
AMENDED PROSPECTUS NECESSARY TO PERMIT RESALES OF THE NEW NOTES OR TO AND
INCLUDING THE DATE ON WHICH THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF NEW
NOTES MAY BE RESUMED, AS THE CASE MAY BE.
Holders of Old Notes whose Old Notes are accepted for exchange will not
receive accrued interest on such Old Notes for any period from and after the
last Interest Payment Date to which interest has been paid or duly provided for
on such Old Notes prior to the original issue date of the New Notes or, if no
such interest has been paid or duly provided for, will not receive any accrued
interest on such Old Notes, and the undersigned waives the right to receive any
interest on such Old Notes accrued from and after such Interest Payment Date or,
if no such interest has been paid or duly provided for, from and after February
29, 1996.
All authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except
pursuant to the withdrawal rights set forth in the Prospectus, this tender is
irrevocable.
-3-
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THE
BOXES BELOW AND FOLLOW THE INSTRUCTIONS BEGINNING ON PAGE ___ HEREOF.
ALL TENDERING HOLDERS COMPLETE THIS BOX 1:
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 1
Description of Old Notes Tendered
(Attach additional signed pages, if necessary)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
If blank, please print name(s) Certificate Number(s) of Principal Amount of Principal Amount of
and address(es) of registered Old Notes* Old Notes Old Notes Tendered**
holder(s), exactly as name(s) -----------------------------------------------------------------------------------------
appear(s) on Old Note
Certificate(s): -----------------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Total Principal Total Principal Amount
Amount $ Tendered $
- - --------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000 and integral multiples thereof. All Old Notes
held shall be deemed tendered unless a lesser number is specified in this column. See Instruction 4.
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 2
Book-Entry Transfer
(See Instruction 1 Below)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY
THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ________________________________________________________________________________
DTC Account Number ___________________________________________________________________________________________
Transaction Code Number ______________________________________________________________________________________
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 3
Notice of Guaranteed Delivery
(See Instruction 1 Below)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
/ / CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holders(s) ________________________________________________________________________________
Window Ticket Number (if any) ________________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery ___________________________________________________________
Name of Institution which Guaranteed Delivery ________________________________________________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer: _________________________________________________
Name of Tendering Institution ________________________________________________________________________________
DTC Account Number ___________________________________________________________________________________________
Transaction Code Number ______________________________________________________________________________________
- - --------------------------------------------------------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 4
Return of Non-Exchanged Old Notes Tendered by Book-Entry Transfer
(See Instructions 4 and 6 Below)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
/ / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES ARE TO BE RETURNED BY CREDITING
THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 5
Participating Broker-Dealer
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
/ / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS
AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name: ________________________________________________________________________________________________________
Address: _____________________________________________________________________________________________________
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 6
Tendering Holder Signature
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
HOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 2, 5 AND 6 BELOW)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 IN BOX 9 BELOW)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on Certificate(s) for the Old Notes hereby tendered
or on a security position listing, or by a person(s) authorized to become the registered holder(s) by endorsements and
documents transmitted herewith (including such opinions of counsel, certifications and other information as may be required
by the Company or the Trustee for the Old Notes to comply with the restrictions on transfer applicable to the Old Notes).
If signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another
acting in a fiduciary capacity or representative capacity, please set forth the signer's full title. See Instruction 5
below.
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Date ___________________________ , 1996
Name(s)_______________________________________________________________________________________________________________________
(PLEASE PRINT)
Address ______________________________________________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _______________________________________________________________________________________________
______________________________________________________________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
______________________________________________________________________________________________________________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1, 2 and 5 Below)
Authorized Signature__________________________________________________________________________________________________________
Name _________________________________________________________________________________________________________________________
(PLEASE PRINT)
Date ___________________________ , 1996
Capacity or Title ____________________________________________________________________________________________________________
Name of Firm _________________________________________________________________________________________________________________
Address ______________________________________________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _______________________________________________________________________________________________
- - --------------------------------------------------------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 7
SPECIAL EXCHANGE INSTRUCTIONS
(See Instructions 1, 5 and 6 Below)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
To be completed ONLY if the New Notes are to be issued in the name of someone other than the registered holder of the Old
Notes whose name(s) appear(s) above.
Issue New Notes to: __________________________________________________________________________________________________________
Name _________________________________________________________________________________________________________________________
(Please Print)
Address ______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
(Include Zip Code)
______________________________________________________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 8
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6 Below)
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
To be completed ONLY if New Notes are to be sent to someone other than the registered holder of the Old Notes whose
name(s) appear(s) above, or to such registered holder(s) at an address other than that shown above.
Mail New Notes to:
Name _________________________________________________________________________________________________________________________
(Please Print)
Address ______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
(Include Zip Code)
______________________________________________________________________________________________________________________________
(Taxpayer Identification or Social Security No.)
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------------------------------------------------------
BOX 9
SUBSTITUTE FORM W-9
- - --------------------------------------------------------------------------------------------------------------------------------
To Be Completed by All Tendering Securityholders
(See Instruction 9 Below)
Sign this Substitute Form W-9 in Addition to the Signature(s) Required in Box 6
PAYER'S NAME: STATE STREET BANK AND TRUST COMPANY
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
SUBSTITUTE Part 1-Please provide your TIN (either your social security TIN _____________
Form W-9 number or employer identification number) in the box to the
right and certify by signing and dating below.
Department of the Treasury
Internal Revenue Service
Part 2-Awaiting TIN / /
Payer's Request for Taxpayer SIGN THIS FORM and THE CERTIFICATION OF
Identification Number (TIN) AWAITING TAXPAYER IDENTIFICATION NUMBER BELOW.
and Certification
Part 3-Exempt / /
See enclosed Guidelines for additional information and SIGN THIS FORM.
- - --------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued
to me); and
(2) I am not subject to backup withholding because (i) I am exempt from backup withholding, or (ii) I have not been notified
by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all
interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding.
(3) Any other information provided on this form is true and correct.
CERTIFICATION INSTRUCTIONS--You must cross out item (iii) in Part (2) above if you have been notified by the IRS that
you are subject to backup withholding because of underreporting interest or dividends on your tax return and you are no
longer subject to backup withholding.
SIGNATURE _____________________________________________________________________________ DATE ______________________________
- - --------------------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART 2 OF THE SUBSTITUTE FORM W-9
- - --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either
(1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal
Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near
future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all
payments made to me on account of the New Notes shall be retained until I provide a taxpayer identification number to
the Exchange Agent and that, if I do not provide my taxpayer identification number within 60 days, such retained amounts
shall be remitted to the Internal Revenue Service as backup withholding and 31% of all reportable payments made to me
thereafter will be withheld and remitted to the Internal Revenue Service until I provide a taxpayer identification
number.
SIGNATURE: ____________________________________________________________________________ DATE: ______________________________
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER FOR ADDITIONAL INFORMATION.
-8-
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
GENERAL
Please do not send Certificates for Old Notes directly to the Company.
Your Old Note Certificates, together with your signed and completed Letter of
Transmittal and any required supporting documents should be mailed in the
enclosed addressed envelope, or otherwise delivered, to the Exchange Agent, at
either of the addresses indicated on the first page hereof. THE METHOD OF
DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES.
This Letter of Transmittal is to be completed either if (a) Certificates
are to be forwarded herewith or (b) tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Exchange Offer-
Procedures for Tendering Old Notes" in the Prospectus. Certificates, or timely
confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC, as well as this Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal, must
be received by the Exchange Agent at one of its addresses set forth herein on or
prior to 5:00 p.m., New York City time, on the Expiration Date. Old Notes may
be tendered in whole or in part in the principal amount of $1,000 and integral
multiples of $1,000.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent on or prior
to the Expiration Date or (iii) who cannot complete the procedures for delivery
by book-entry transfer on a timely basis, may tender their Old Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer -- Procedures
for Tendering Old Notes" in the Prospectus and by completing Box 3 hereof.
Pursuant to such procedures: (i) such tender must be made by or through an
Eligible Institution (as defined below); (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by the Company, must be received by the Exchange Agent on or prior to the
Expiration Date; and (iii) the Certificates (or a book-entry confirmation (as
defined in the Prospectus)) representing all tendered Old Notes, in proper form
for transfer, together with a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
any other documents required by this Letter of Transmittal, must be received by
the Exchange Agent within three New York Stock Exchange, Inc. trading days after
the date of execution of such Notice of Guaranteed Delivery, all as provided in
"The Exchange Offer -- Procedures for Tendering Old Notes" in the Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old Notes to be
properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein, "Eligible Institution" means a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor
institution," including (as such terms are defined therein) (i) a bank; (ii) a
broker, dealer, municipal securities broker or dealer or government securities
broker or dealer; (iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a savings
association that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange, Inc. Medallion Signature Program or the
Stock Exchanges Medallion Program.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), waives any right to receive any notice of the acceptance of
such tender.
2. GUARANTEE OF SIGNATURES
No signature guarantee on this Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder
(which term, for purposes of this document, shall include any participant
in DTC whose name appears on a security position listing as the owner of
the Old Notes) of Old Notes tendered herewith, unless such holder(s) has
completed either the box entitled "Special Exchange Instructions" (Box 7)
or the box entitled "Special Delivery Instructions" (Box 8) above, or
(ii) such Old Notes are tendered for the account of a firm that is an
Eligible Institution.
In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal (Box 6). See Instruction 5.
-9-
<PAGE>
3. INADEQUATE SPACE
If the space provided in the box captioned "Description of Old Notes" is
inadequate, the Certificate number(s) and/or the principal amount of Old Notes
and any other required information should be listed on a separate signed
schedule which should be attached to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS
Tenders of Old Notes will be accepted only in the principal amount of
$1,000 and integral multiples thereof. If less than all the Old Notes evidenced
by any Certificate submitted are to be tendered, fill in the principal amount of
Old Notes which are to be tendered in Box 1 under the column "Principal Amount
of Old Notes Tendered". In such case, new Certificate(s) for the remainder of
the Old Notes that were evidenced by your old Certificate(s) will only be sent
to the holder of the Old Notes, promptly after the Expiration Date. All Old
Notes represented by Certificates delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time on or prior to the Expiration Date. In order for a withdrawal to be
effective on or prior to that time, a written, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be timely received by the
Exchange Agent at one of its addresses set forth above or in the Prospectus on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Old Notes to be withdrawn, the aggregate
principal amount of Old Notes to be withdrawn, and (if Certificates for such Old
Notes have been tendered) the name of the registered holder of the Old Notes as
set forth on the Certificate for the Old Notes, if different from that of the
person who tendered such Old Notes. If Certificates for the Old Notes have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such Certificates for the Old Notes, the tendering holder
must submit the serial numbers shown on the particular Certificates for the Old
Notes to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Old Notes tendered
for the account of an Eligible Institution. If Old Notes have been tendered
pursuant to the procedures for book-entry transfer set forth in "The Exchange
Offer -- Procedures for Tendering Old Notes," the notice of withdrawal must
specify the name and number of the account at DTC to be credited with the
withdrawal of Old Notes, in which case a notice of withdrawal will be effective
if delivered to the Exchange Agent by written, telegraphic, telex or facsimile
transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old
Notes properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any subsequent time on or prior to the
Expiration Date by following any of the procedures described in the Prospectus
under "The Exchange Offer -- Procedures for Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, in its
sole discretion, whose determination shall be final and binding on all parties.
Neither the Company, any affiliates or assigns of the Company, the Exchange
Agent nor any other person shall be under any duty to give any notification of
any irregularities in any notice of withdrawal or incur any liability for
failure to give a such notification. Any Old Notes which have been tendered but
which are withdrawn will be returned to the holder thereof without cost to such
holder promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS
If this Letter of Transmittal is signed by the registered holder(s) of the
Old Notes tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different name(s) on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by the Company, must
submit proper evidence satisfactory to the Company, in its sole discretion, of
such persons' authority to so act.
When this Letter of Transmittal is signed by the registered owner(s) of the
Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or
separate bond power(s) are required unless New Notes are to be issued in the
name of a person other than the registered holder(s). However, if New Notes are
to be issued in the name of a person other than the registered holder(s),
signature(s) on such Certificate(s) or bond power(s) must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Old Notes listed, the certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered owner(s) appear(s) on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
the Company or the Trustee for the Old Notes may require in accordance with the
restrictions on transfer applicable to the Old Notes. Signatures on such
Certificates or bond powers must be guaranteed by an Eligible Institution.
-10-
<PAGE>
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS
If New Notes are to be issued in the name of a person other than the signer
of this Letter of Transmittal, or if New Notes are to be sent to someone other
than the signer of this Letter of Transmittal or to an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed (Box 7 and 8). Certificates for Old Notes not exchanged will be
returned by mail or, if tendered by book-entry transfer, by crediting the
account indicated above maintained at DTC. See Instruction 4.
7. DETERMINATION OF VALIDITY
The Company will determine, in its sole discretion, all questions as to the
form of documents, validity, eligibility (including time of receipt) and
acceptance for exchange of any tender of Old Notes, which determination shall be
final and binding on all parties. The Company reserves the absolute right to
reject any and all tenders determined by it not to be in proper form or the
acceptance of which, or exchange for, may, in the view of counsel to the
Company, be unlawful. The Company also reserves the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer set forth
in the Prospectus under "The Exchange Offer -- Certain Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old Notes of
any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The Company's interpretation of the terms and conditions of the Exchange
Offer (including this Letter of Transmittal and the instructions hereto) will be
final and binding. No tender of Old Notes will be deemed to have been validly
made until all irregularities with respect to such tender have been cured or
waived. Neither the Company, any affiliates or assigns of the Company, the
Exchange Agent, nor any other person shall be under any duty to give
notification of any irregularities in tenders or incur any liability for failure
to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES
Questions and requests for assistance may be directed to the Exchange Agent
at its address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9
Under U.S. Federal income tax law, a holder whose tendered Old Notes are
accepted for exchange is required, unless an exemption applies, to provide the
Exchange Agent with such holder's correct taxpayer identification number ("TIN")
on Substitute Form W-9 of this Letter of Transmittal (Box 9) and certify, under
penalties of perjury, that such number is correct and he or she is not subject
to backup withholding. If the Exchange Agent is not provided with the correct
TIN, the Internal Revenue Service (the "IRS") may subject the holder or other
payee to a $50 penalty. In addition, payments to such holders or other payees
with respect to Old Notes exchanged pursuant to the Exchange Offer may be
subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 (Box 9) may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below Substitute Form W-9 in order to avoid backup
withholding. Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent.
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old Notes or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old Notes. If the Old Notes are registered in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below and check the box in Part 3 of
Box 9 for "exempt", to avoid possible erroneous backup withholding. A foreign
person may qualify as an exempt recipient by submitting a properly completed IRS
Form W-8, signed under penalties of perjury, attesting to that holder's exempt
status. Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
-11-
<PAGE>
10. LOST, DESTROYED OR STOLEN CERTIFICATES
If any Certificate(s) representing Old Notes have been lost, destroyed or
stolen, the holder should promptly notify the Exchange Agent. The holder will
then be instructed as to the steps that must be taken in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or stolen
Certificate(s) have been followed.
11. SECURITY TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith. If, however, New Notes are to
be delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Notes tendered, or if a transfer tax is imposed for
any reason other than the exchange of Old Notes in connection with the Exchange
Offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE
EXPIRATION DATE.
-12-
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
A. TIN - The Taxpayer Identification Number for most individuals is your
social security number. Refer to the following chart to determine the
appropriate number:
- - --------------------------------------------------------------------------------
Give the
SOCIAL
For this type of SECURITY
account Number of
------------------------ --------------------------
1. Individual The individual
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, the first individual
on the account(1)
3. Custodian account The minor(2)
of a minor (Uniform
Gift to Minors Act)
4. a. The usual The grantor-trustee(1)
revocable
savings trust
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
state law
5. Sole proprietorship The owner(3)
Give the
EMPLOYER
For this type of IDENTIFICATION
account Number of
------------------------ --------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, Legal entity(4)
estate or pension
trust
8. Corporate The corporation
9. Association, club, The organization
religious,
charitable,
educational or
other tax-exempt
organization
10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's name and social security
number.
(3) Show the individual's name. You may also enter your business name or
"doing business as" name. You may use either your Social Security number
or your employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
B. Exempt Payees - The following lists exempt payees. If you are exempt, you
must nonetheless complete the form and provide your TIN in order to
establish that you are exempt. Check the box in Part 3 of the form, sign
and date the form.
For this purpose, Exempt Payees include: (1) A corporation; (2) An
organization exempt from tax under section 501(a), or an individual
retirement plan (IRA) or a custodial account under section 403(b)(7); (3)
The United States or any of its agencies or instrumentalities; (4) A
state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities; (5) A foreign
government or any of its political subdivisions, agencies or
instrumentalities; (6) An international organization or any of its
agencies or instrumentalities; (7) A foreign central bank of issue; (8)
A dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.; (9) A real estate investment trust; (10) An
entity registered at all times during the tax year under the Investment
Company Act of 1940; (11) A common trust fund operated by a bank under
section 584(a); (12) A financial institution.
C. OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, application for a Social Security Number, or
Form SS-4, Application for Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue
Service and apply for a number.
D. PRIVACY ACT NOTICE
Section 6109 requires most recipients of dividend, interest or other
payments to give taxpayer identification numbers to payers who must report
the payments to IRS. IRS uses the numbers for identification purposes.
Payers must be given the numbers whether or not recipients are required to
file tax returns. Payers must generally withhold 31% of taxable-interest,
dividend, and certain other payments to a payee who does not furnish a
taxpayer. Certain penalties may also apply.
E. PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. If you fail
to include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of
an under-payment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If
you make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
-13-
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
7 3/8% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
OF
SOLECTRON CORPORATION
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if
(i) certificates for the Company's (as defined below) 7 3/8% Senior Subordinated
Notes due 2006, Series A (the "Old Notes") are not immediately available,
(ii) the Old Notes, the Letter of Transmittal and all other required documents
cannot be delivered to State Street Bank and Trust Company (the "Exchange
Agent") on or prior to the Expiration Date (as defined in the Prospectus
referred to below) or (iii) the procedures for delivery by book-entry transfer
cannot be completed on a timely basis. This Notice of Guaranteed Delivery may
be delivered by hand, overnight courier or mail, or transmitted by facsimile
transmission, to the Exchange Agent. See "The Exchange Offer Procedures for
Tendering Old Notes" in the Prospectus.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
BY MAIL: BY OVERNIGHT DELIVERY OR HAND:
- - ------------------------------------- --------------------------------------
State Street Bank and Trust Company State Street Bank and Trust Company
2 International Place, 4th Floor 2 International Place, 4th Floor
Boston, MA 02110 Boston, MA 02110
Attn: Corporate Trust Department Attn: Corporate Trust Department
(Solectron Corporation, (Solectron Corporation,
7 3/8% Senior Notes due 2006) 7 3/8% Senior Notes due 2006)
OR
BY HAND:
-------------------------------------------------
State Street Bank and Trust Company, N.A.
61 Broadway
Concourse Level
Corporate Trust Window
New York, NY 10006
TO CONFIRM BY TELEPHONE OR FOR INFORMATION:
(617) 664-5610 (Massachusetts)
FACSIMILE TRANSMISSIONS:
(617) 664-5635 (Massachusetts)
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA
FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
Ladies and Gentlemen:
The undersigned hereby tenders to Solectron Corporation, a California
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus dated __________, 1996 (as the same may be amended or
supplemented from time to time, the "Prospectus") and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old Notes set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering Old Notes."
<PAGE>
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- - ------------------------------------------------------------------------------------------
NAME(S), ADDRESS(ES) AND AREA CODE(S) AND
TELEPHONE NUMBER(S) OF REGISTERED HOLDER(S): CERTIFICATE NUMBER(S) (IF AVAILABLE):
- - ------------------------------------------------------------------------------------------
<S> <C>
- - ------------------------------------------------------------------------------------------
Aggregate Principal Amount Tendered: $
- - ------------------------------------------------------------------------------------------
Signature(s):
- - ------------------------------------------------------------------------------------------
If Old Notes will be tendered by book-entry transfer, please provide the following
information:
Name of Tendering Institution: __________________________________________________
DTC Account Number: _____________________________________________________________
Date: ___________________________________________________________________________
Transaction Code Number: ________________________________________________________
- - ------------------------------------------------------------------------------------------
</TABLE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange, Inc.
Medallion Signature Program or the Stock Exchanges Medallion Program (each of
the foregoing being referred to as an "Eligible Institution"), hereby guarantees
to deliver to the Exchange Agent, at one of its addresses set forth above,
either the Old Notes tendered hereby in proper form for transfer, or
confirmation of the book-entry transfer of such Old Notes to the Exchange
Agent's account at The Depositary Trust Company ("DTC"), pursuant to the
procedures for book-entry transfer set forth in the Prospectus, in either case
together with one or more properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof) and any other required documents within three
New York Stock Exchange trading days after the date of execution of this Notice
of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Old Notes tendered hereby to the Exchange Agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
- - --------------------------------------------------------------------------------
Name of Firm: Authorized Signature:
- - --------------------------------------------------------------------------------
Address: Name (Please Print):
------------------------------
Capacity or Title:
- - --------------------------------------------------------------------------------
Area Code and Telephone Number: Date:
- - --------------------------------------------------------------------------------
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY.
ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS.
-2-
<PAGE>
EXHIBIT 99.3
(FORM OF EXCHANGE AGENCY AGREEMENT)
__________ __, 1996
State Street Bank and Trust Company
4th Floor
2 International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Department
Ladies and Gentlemen:
Solectron Corporation, a California corporation (the "Company"), hereby
appoints State Street Bank and Trust Company, a trust company duly organized and
existing under the laws of the Commonwealth of Massachusetts ("State Street"),
to act as exchange agent (the "Exchange Agent") pursuant to this Exchange Agent
Agreement (the "Agreement") in connection with an exchange offer by the Company
to exchange up to $150,000,000 aggregate principal amount of its 7 3/8% Senior
Notes due 2006, Series B (the "New Notes"), which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of its outstanding 7 3/8% Senior Notes due 2006, Series A (the "Old
Notes," and together with the New Notes, the "Notes"). The terms and conditions
of the exchange offer are set forth in a Prospectus dated _____ __, 1996 (as the
same may be amended or supplemented from time to time, the "Prospectus") and in
the related Letter of Transmittal, which together constitute the "Exchange
Offer." The registered holders of the Notes are hereinafter referred to as the
"Holders." Capitalized terms used herein and not defined shall have the
respective meanings described thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Company and State Street contained herein and subject to the terms and
conditions hereof, this Agreement sets forth the agreement between the Company
and State Street as Exchange Agent for the Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
(a) The Company hereby authorizes State Street to act as
Exchange Agent in connection with the Exchange Offer and State Street agrees to
act as Exchange Agent in connection with the Exchange Offer. As Exchange Agent,
State Street will perform those services as are outlined herein or which are
customarily performed by an exchange agent in connection with an exchange offer
of like nature, including, but not limited to, accepting tenders of Old Notes,
assisting the Company in the preparation of the documentation necessary to
effect the transactions herein contemplated (without assuming responsibility for
such documentation except to the extent the information contained in such
documentation has been furnished to the Company in writing by State Street), and
communicating generally regarding the Exchange Offer with brokers, dealers,
commercial banks, trust companies and other persons, including Holders of the
Old Notes.
(b) The Company acknowledges and agrees that State Street has
been retained pursuant to this Agreement to act solely as Exchange Agent in
connection with the Exchange Offer and, in such capacity, State Street shall
perform such duties as are outlined herein and which are specifically set
<PAGE>
forth in the section of the Prospectus captioned "The Exchange Offer" and in the
Letter of Transmittal; PROVIDED, HOWEVER, that in no way will State Street's
general duty to act in good faith and without gross negligence or willful
misconduct be discharged by the foregoing.
(c) State Street will examine each of the Letters of Transmittal
and certificates for Old Notes and any other documents delivered or mailed to
State Street by or for Holders of the Old Notes, and any book-entry
confirmations (as defined in the Prospectus) received by State Street with
respect to the Old Notes, to ascertain whether: (i) the Letters of Transmittal
and any such other documents are duly executed and properly completed in
accordance with the instructions set forth therein and that such book-entry
confirmations are in due and proper form and contain the information required to
be set forth therein, and (ii) the Old Notes have otherwise been properly
tendered. In each case where the Letters of Transmittal or any other documents
have been improperly completed or executed or where book-entry confirmations are
not in due and proper form or omit certain information, or any of the
certificates for Old Notes are not in proper form for transfer or some other
irregularity in connection with the tender or acceptance of the Old Notes
exists, State Street will endeavor, subject to the terms and conditions of the
Exchange Offer, to advise the tendering Holders of the irregularity and to take
any other action as may be necessary or advisable to cause such irregularity to
be corrected. Notwithstanding the above, State Street shall not be under any
duty to give any notification of any irregularities in tenders or incur any
liability for failure to give any such notification. State Street is authorized
to accept and act upon letters of transmittal sent by facsimile.
(d) With the approval of the President, any Senior Vice
President, any Executive Vice President, any Vice President or the Treasurer or
any Assistant Treasurer of the Company or any other party designated by any such
officer (such approval, if given orally, to be confirmed in writing), State
Street is authorized to waive any irregularities in connection with any tender
of Old Notes pursuant to the Exchange Offer.
(e) Tenders of Old Notes may be made only as set forth in the
Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Old Notes shall be considered properly tendered only when
tendered in accordance with such procedures set forth therein. Notwithstanding
the provisions of this paragraph, Old Notes which the President, any Senior Vice
President, any Executive Vice President, any Vice President or the Treasurer,
any Assistant Treasurer or any other designated officer of the Company shall
approve (such approval, if given orally, to be confirmed in writing) as having
been properly tendered shall be considered to be properly tendered.
(f) State Street shall advise the Company with respect to any
Old Notes received as soon as possible after 5:00 p.m., New York City time, on
the Expiration Date and accept its instructions with respect to disposition of
such Old Notes.
(g) Upon acceptance by the Company of any Old Notes duly
tendered pursuant to the Exchange Offer (such acceptance if given orally, to be
confirmed in writing), State Street will cause New Notes in exchange therefor to
be issued as promptly as possible (subject to receipt from the Company of
appropriate certificates under the related Indenture), and State Street will
deliver such New Notes on behalf of the Company at the rate of $1,000 principal
amount of New Notes for each $1,000 principal amount of Old Notes tendered as
promptly as possible after acceptance by the Company of the Old Notes for
exchange and notice (such notice if given orally, to be confirmed in writing) of
such acceptance by the Company; PROVIDED, HOWEVER, that in all cases, Old Notes
tendered pursuant to the Exchange Offer will
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<PAGE>
be exchanged only after timely receipt by State Street of certificates for such
Old Notes (or a book-entry confirmation), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees and any other required documents. Unless otherwise instructed by the
Company, State Street shall issue New Notes only in denominations of $1,000 or
any integral multiple thereof.
(h) Tenders pursuant to the Exchange Offer are irrevocable,
except that, subject to the terms and the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time on or prior to the Expiration Date in accordance
with the terms of the Exchange Offer.
(i) Notice of any decision by the Company not to exchange any
Old Notes tendered shall be given by the Company either orally (if given orally,
to be confirmed in writing) or in a written notice to State Street.
(j) If, pursuant to the Exchange Offer, the Company does not
accept for exchange all or part of the Old Notes tendered because of an invalid
tender or the occurrence of certain other events set forth in the Prospectus
under the caption "The Exchange Offer -- Certain Conditions to the Exchange
Offer" or otherwise, State Street shall, upon notice from the Company (such
notice, if given orally, to be confirmed in writing), promptly after the
expiration or termination of the Exchange Offer return such certificates for
unaccepted Old Notes (or effect appropriate book-entry transfer), together with
any related required documents and the Letters of Transmittal relating thereto
that are in State Street's possession, to the persons who deposited such
certificates (or effected such book-entry transfer).
(k) Certificates for reissued Old Notes, unaccepted Old Notes or
New Notes (other than those effected by book-entry transfer) shall be forwarded
by (a) first-class mail under a blanket surety bond obtained by State Street
protecting State Street and the Company from loss or liability arising out of
the non-receipt or non-delivery of such certificates or (b) by registered mail
insured by State Street separately for the replacement value of each such
certificate.
(l) State Street is not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, commercial
bank, trust company or other nominee or to engage or use any person to solicit
tenders.
(m) As Exchange Agent, State Street:
(i) shall have no duties or obligations other than those
specifically set forth in the Prospectus, the Letter of Transmittal or herein or
as may be subsequently agreed to in writing by the parties thereto;
(ii) will make no representations and will have no
responsibilities as to the validity, value or genuineness of any of the
certificates for the Old Notes deposited pursuant to the Exchange Offer, and
will not be required to and will make no representation as to the validity,
value or genuineness of the Exchange Offer; PROVIDED, HOWEVER, that in no way
will State Street's general duty to act in good faith and without gross
negligence or willful misconduct be limited by the foregoing;
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(iii) shall not be obligated to take any legal action
hereunder which might in State Street's reasonable judgment involve any expense
or liability, unless State Street shall have been furnished with reasonable
indemnity;
(iv) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to State Street and reasonably
believed by State Street to be genuine and to have been signed by the proper
party or parties;
(v) may reasonably act upon any tender, statement,
request, comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but also as to
the truth and accuracy of any information contained therein, which State Street
believes in good faith to be genuine and to have been signed or represented by a
proper person or persons acting in a fiduciary or representative capacity (so
long as proper evidence of such fiduciary's or representative's authority so to
act is submitted to State Street) and State Street examines and reasonably
concludes that such evidence properly establishes such authority;
(vi) may rely on and shall be protected in acting upon
written or oral instructions from the President, any Senior Vice President, any
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer or any other designated officer of the Company;
(vii) may consult with its own counsel with respect to any
questions relating to State Street's duties and responsibilities and the written
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by State Street
hereunder in good faith and in accordance with the written opinion of such
counsel; and
(viii) shall not advise any person tendering Old Notes
pursuant to the Exchange Offer as to whether to tender or refrain from tendering
all or any portion of its Old Notes or as to the market value, decline or
appreciation in market value of any Old Notes that may or may not occur as a
result of the Exchange Offer or as to the market value of the New Notes.
(n) State Street shall take such action as may from time to time
be requested by the Company (and such other action as State Street may
reasonably deem appropriate) to furnish copies of the Prospectus, Letter of
Transmittal and the Notice of Guaranteed Delivery, or such other forms as may be
approved from time to time by the Company, to all persons requesting such
documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for tendering into (or withdrawing from) the Exchange Offer.
The Company will furnish you with copies of such documents at your request.
(o) On and prior to the Expiration Date, State Street shall
orally advise the Company each day (and promptly thereafter confirm in writing
to the Company and such other person or persons as the Company may request and
more frequently during the week immediately preceding the Expiration Date or if
otherwise reasonably requested by the Company), regarding the aggregate
principal amount of Old Notes which have been duly tendered pursuant to the
Exchange Offer and the items received by State Street pursuant to the Exchange
Offer and this Agreement, separately reporting and giving cumulative totals as
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to items properly received and items improperly received. In addition, State
Street will also provide, and cooperate in making available to the Company, or
any such other person or persons designated by the Company (such request if made
orally, to be confirmed in writing) made from time to time, such other
information as the Company may reasonably request. Such cooperation shall
include, without limitation, the granting by State Street to the Company, and
such person or persons as the Company may designate, access to those persons on
State Street's staff who are responsible for receiving tenders to ensure that
immediately prior to the Expiration Date the Company shall have received
adequate information in sufficient detail to enable the Company to decide
whether to extend the Exchange Offer. State Street shall prepare a final list
of all persons whose tenders were accepted, the aggregate principal amount of
Old Notes tendered, the aggregate principal amount of Old Notes accepted and
deliver said list to the Company.
(p) Letters of Transmittal, book-entry confirmations and Notices
of Guaranteed Delivery shall be stamped by State Street as to the date and the
time of receipt thereof and shall be preserved by State Street for a period of
time at least equal to the period of time State Street preserves other records
pertaining to the transfer of securities, or one year, whichever is longer, and
thereafter shall be delivered by State Street to the Company. State Street
shall dispose of unused Letters of Transmittal and other surplus materials as
instructed by the Company.
(q) State Street hereby expressly waives any lien, encumbrance
or right of set-off whatsoever that State Street may have with respect to funds
deposited with it for the payment of transfer taxes by reasons of amounts, if
any, borrowed by the Company, or any of its subsidiaries or affiliates pursuant
to any loan or credit agreement with State Street or for compensation owed to
State Street hereunder or for any other matter.
2. COMPENSATION
Pursuant to a letter agreement, dated as of February __, 1996
(the "Bond Trusteeships Fee Schedule"), between the Company and State Street, no
additional compensation will be payable to State Street in its capacity as
Exchange Agent, it being understood and agreed that the Acceptance Fee and the
Annual Administration Fee payable pursuant to the Bond Trusteeships Fee Schedule
are intended to cover, among other things, the services of State Street as
Exchange Agent; PROVIDED, HOWEVER, that State Street reserves the right to
receive reimbursement from the Company for any reasonable out-of-pocket expenses
incurred as Exchange Agent in performing the services described herein.
3. INDEMNIFICATION
(a) The Company hereby agrees to protect, defend, indemnify and
hold harmless State Street against and from any and all costs, losses,
liabilities, expenses and claims imposed upon or asserted against State Street
on account of any action taken or omitted to be taken by State Street in
connection with its acceptance of or performance of its duties under this
Agreement and the documents related thereto as well as the reasonable costs and
expenses of defending itself against any claim or liability arising out of or
relating to this Agreement and the documents related thereto. This
indemnification shall survive the release, discharge, termination, and/or
satisfaction of this Agreement. Anything in this Agreement to the contrary
notwithstanding, the Company shall not be liable for indemnification or
otherwise for any loss, liability, cost or expense to the extent arising out of
State Street's bad faith, gross negligence or willful misconduct. In no case
shall the Company be liable under this Section 3 with respect to any claim
against State Street unless the Company shall be notified in writing by State
Street of the written assertion of a
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claim against State Street or of any other action commenced against State
Street, promptly after State Street shall have received such written assertion
or shall have been served with a summons in connection therewith. The Company
shall be entitled to participate at its own expense in the defense of any such
claim or other action, and, if the Company so elects, the Company may assume the
defense of any pending or threatened action against State Street in respect of
which indemnification may be sought hereunder, in which case the Company shall
not thereafter be responsible for the subsequently-incurred fees and
disbursements of legal counsel for State Street under this paragraph; PROVIDED
that the Company shall not be entitled to assume the defense of any such action
if the named parties to such action include both the Company and State Street
and representation of both parties by the same legal counsel would, in the
written opinion of counsel for State Street, be inappropriate due to actual or
potential conflicting interests between the Company and State Street. It is
understood that the Company shall not be liable under this paragraph for the
fees and disbursements of more than one legal counsel for State Street. In the
event that the Company shall assume the defense of any such suit, the Company
shall not therewith be liable for the subsequently-incurred fees and expenses of
any counsel retained by State Street.
(b) State Street agrees that, without the prior written consent
of the Company (which consent shall not be unreasonably withheld), it will not
settle, compromise or consent to the entry of an judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification could
be sought in accordance with the indemnification provision of this Agreement
(whether or not State Street or the Company or any of its directors, officers
and controlling persons is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Company and its directors, officers and controlling
persons from all liability arising out of such claim, action or proceeding.
4. TAX INFORMATION
(a) State Street shall arrange to comply with all requirements
under the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that State Street is required, in
certain instances, to deduct 31% with respect to interest paid on the New Notes
and proceeds from the sale, exchange, redemption or retirement of the New Notes
from Holders who have not supplied their correct Taxpayer Identification Number
or required certification. Such funds will be turned over by State Street to
the Internal Revenue Service.
(b) State Street shall notify the Company of the amount of any
transfer taxes payable in respect of the exchange of Old Notes and, upon receipt
of written approval from the Company, shall deliver or cause to be delivered in
a timely manner to each governmental authority to which any transfer taxes are
payable in respect of the exchange of Old Notes a check in the amount of all
transfer taxes payable, and the Company shall reimburse State Street for the
amount of any and all transfer taxes payable in respect of the exchange of Old
Notes; PROVIDED, HOWEVER, that State Street shall reimburse the Company for
amounts refunded to it in respect of its payment of any such transfer taxes, at
such time as such refund is received by State Street.
5. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed in that state.
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6. NOTICES
Any communication or notice provided for hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon receipt)
by delivery in person, telecopy, or overnight delivery or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
If to the Company:
Solectron Corporation
777 Gibraltar Drive
Milpitas, California 95035
Telecopier No.: (408) 957-8500
Attention: Susan S. Wang, Senior Vice President
and Chief Financial Officer
With a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Telecopier No.: (415) 493-6811
Attention: Steven E. Bochner, Esq.
If to State Street by Mail, Overnight Delivery, or Hand:
State Street Bank and Trust Company
2 International Place
4th Floor
Boston, Massachusetts 02110
Telecopier No.: (617) 664-5635
Attention: Corporate Trust Department
(Solectron Corporation 7 3/8% Senior Notes
due 2006)
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section 6.
7. PARTIES IN INTEREST
This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and nothing in this Agreement, express or implied,
is intended to or shall confer upon any other, person any right, benefit or
remedy of an nature whatsoever under or by reason of this Agreement. Without
limitation of the foregoing, the parties hereto expressly agree that no holder
of Old Notes or New Notes shall have any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
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8. COUNTERPARTS; SEVERABILITY
This Agreement may be executed in one or more counterparts, and
by different parties hereto on separate counterparts, each of which when so
executed shall be deemed an original, and all of such counterparts shall
together constitute one and the same agreement if any term or other provision of
this Agreement or the application thereof is invalid, illegal or incapable of
being enforced by any rule of law or public policy, and all other provisions of
this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the agreements contained herein is not affected
in any manner adverse to any party. Upon such determination that any term or
provision or the application thereof is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the agreements contained herein may be performed
as originally contemplated to the fullest extent possible.
9. CAPTIONS
The descriptive headings contained in this Agreement are included
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT
Other than as set forth in the Prospectus, the Letter of
Transmittal and the Notice of Guaranteed Delivery, this Agreement constitutes
the entire understanding of the parties hereto with respect to the subject
matter hereof. This Agreement may not be amended or modified nor may any
provision hereof be waived except in writing signed by each party to be bound
thereby.
11. TERMINATION
This Agreement shall terminate upon the earlier of (a) the 90th
day following the expiration, withdrawal, or termination of the Exchange Offer,
(b) the close of business on the date of actual receipt of written notice by
State Street from the Company stating that this Agreement is terminated, (c) one
year following the date of this Agreement, or (d) the time and date on which
this Agreement shall be terminated by mutual consent of the parties hereto.
12. MISCELLANEOUS
(a) State Street hereby acknowledges receipt of the Prospectus
and the Letter of Transmittal and the Notice of Guaranteed Delivery and further
acknowledges that it has examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of Transmittal and
the Notice of Guaranteed Delivery (as they may be amended or supplemented from
time to time), on the other hand, shall be resolved in favor of the latter three
documents, except with respect to the duties, liabilities and indemnification of
State Street as Exchange Agent which shall be controlled by this Agreement.
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Kindly indicate your willingness to act as Exchange Agent and
State Street's acceptance of the foregoing provisions by signing in the space
provided below for that purpose and returning to the Company a copy of this
Agreement so signed, whereupon this Agreement and State Street's acceptance
shall constitute a binding agreement between State Street and the Company.
Very truly yours,
SOLECTRON CORPORATION
By:
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Name:
Title:
Accepted and agreed to as of
the date first written above:
STATE STREET BANK AND TRUST COMPANY
By:
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Name:
Title:
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