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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 18, 1996
REGISTRATION NO. 333-14035
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT
NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MICRON ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MINNESOTA 82-0446109
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
900 EAST KARCHER ROAD
NAMPA, IDAHO 83687
(208) 893-3434
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
T. ERIK OAAS
VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
MICRON ELECTRONICS, INC.
900 EAST KARCHER ROAD
NAMPA, IDAHO 83687
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES TO:
LARRY W. SONSINI
JOHN A. FORE
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304
(415) 493-9300
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE(3)
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<S> <C> <C>
Debt Securities and Common Stock, par value $0.01 per
share................................................. $75,000,000 $22,727
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Common Stock, par value $0.01 per share, offered
by selling shareholders............................... $250,000,000 $75,758
</TABLE>
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(1) Or (i) if any Debt Securities are issued at an original issue discount,
such greater principal amount as shall result in an aggregate initial
offering price equal to the amount to be registered or (ii) if any Debt
Securities are issued with a principal amount denominated in a foreign
currency or composite currency, such principal amount as shall result in
an aggregate initial offering price equivalent thereto in United States
dollars at the time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest,
if any, on the Debt Securities.
(3) Registration fee previously paid by registrant.
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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>
PROSPECTUS
$325,000,000
MICRON ELECTRONICS, INC.
[LOGO] DEBT SECURITIES AND COMMON STOCK
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Micron Electronics, Inc. ("MEI" or the "Company") from time to time may
offer its debt securities consisting of debentures, notes, bonds and/or other
unsecured evidences of indebtedness in one or more series ("Debt Securities")
and shares of Common Stock, $.01 par value, of the Company ("Common Stock"),
which together have an aggregate initial public offering price of up to
$75,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including European Currency Units ("ECU"). In addition,
certain shareholders of the Company (the "Selling Shareholders") may from time
to time offer shares of Common Stock, which together have an aggregate initial
public offering price of up to $250,000,000. The Debt Securities and the
Common Stock (collectively, the "Securities") may be offered, separately or
together, in separate series, in amounts, at prices, and on terms to be set
forth in a supplement to this Prospectus (a "Prospectus Supplement").
The Securities may be sold for U.S. Dollars, one or more foreign currencies
or composite currencies or amounts determined by reference to an index and the
principal of and any interest on the Debt Securities may likewise be payable
in U.S. Dollars, one or more foreign currencies or composite currencies or
amounts determined by reference to an index.
The specific terms of the Securities in respect of which this Prospectus is
being delivered, such as (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, a purchase price, currency,
denomination, maturity, premium, rate (or manner of calculation thereof) and
time of payment of interest, terms for redemption at the option of the Company
or the Holder or for sinking fund payments, any conversion or exchange
provisions and the initial public offering price and (ii) in the case of
Common Stock, the number of shares offered for sale by the Company and the
Selling Shareholders, if any, certain information with respect to the Selling
Shareholders, if any, and the initial public offering price or method of
determining the initial public offering price, will be, where applicable, set
forth in an accompanying Prospectus Supplement. See "Description of Debt
Securities" and "Description of Capital Stock."
Any statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in the accompanying
Prospectus Supplement.
SEE "RISK FACTORS" ON PAGE 3 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
SECURITIES.
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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.
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The Securities may be sold through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone.
The Securities may also be sold directly by the Company or the Selling
Shareholders or through agents designated from time to time. If any
underwriters or agents are involved in the sale of the Securities, their
names, the principal amount of Securities to be purchased by them and any
applicable fee, commission or discount arrangements with them will be set
forth in the Prospectus Supplement. See "Plan of Distribution."
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This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS OCTOBER 21, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, NW, Washington, D.C. 20549, and at the Commission's
Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, NW, Washington, D.C.
20549, at prescribed rates. The Common Stock is listed on the Nasdaq National
Market under the symbol "MUEI." Reports and other information concerning the
Company may be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, Washington, D.C. 20006. The Commission maintains a World
Wide Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of the World Wide Web site is http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities. This Prospectus which
constitutes part of the Registration Statement does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract
or other document are not necessarily complete, and in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference. For further information with respect to the
Company, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 29, 1996; and
(b) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A (No. 0-17932) filed on August 16, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Registration Statement of
which this Prospectus forms a part and prior to the termination of the
offering of the Securities offered hereby shall be deemed to be incorporated
by reference into this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement or this Prospectus to the extent
that a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed
to T. Erik Oaas, Vice President, Finance and Chief Financial Officer, Micron
Electronics, Inc., 900 East Karcher Road, Nampa, Idaho 83687, telephone (208)
893-3434.
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THE COMPANY
Micron Electronics, Inc. ("MEI" or the "Company") is a leading provider of
PC systems through the direct sales channel in the United States. The
Company's PC operations develop, market, manufacture, sell and support a range
of memory-intensive, high performance desktop and notebook PC systems and
network servers under the Micron brand name. In addition to its PC operations,
the Company has contract manufacturing and component recovery operations. The
Company's wholly-owned subsidiary, Micron Custom Manufacturing Services, Inc.,
is a contract manufacturer specializing in the assembly of custom complex
printed circuit boards, memory modules and system level products. The
Company's component recovery operations recover, assemble, test, grade and
market nonstandard random access memory components not meeting full industry
specifications.
On April 7, 1995, Micron Computer, Inc. and the former Micron Custom
Manufacturing Services, Inc., then subsidiaries of the Company's parent,
Micron Technology, Inc., merged with and into ZEOS International, Ltd., and
the surviving corporation's name was changed to "Micron Electronics, Inc." The
Company is incorporated in Minnesota, its executive offices are located at 900
East Karcher Road, Nampa, Idaho, 83687, and its telephone number is (208) 893-
3434.
RISK FACTORS
Prior to making an investment decision with respect to the Securities
offered hereby, prospective investors should carefully consider the specific
factors set forth under the caption "Risk Factors" in the applicable
Prospectus Supplement pertaining thereto, together with all of the other
information appearing herein or therein or incorporated by reference herein,
in light of their particular investment objectives and financial
circumstances.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
used for general corporate purposes, including capital expenditures and to
meet working capital needs. In addition, the Company from time to time
considers acquisitions of complementary businesses, assets or technologies,
and although there are no current agreements or understandings with respect to
any such acquisitions, and the Company is not currently negotiating any
potential acquisition, the Company desires to be able to respond to
opportunities as they arise. Pending such uses, the Company will invest the
net proceeds in interest-bearing securities.
The Company will not receive any of the proceeds from the sale, if any, of
shares of Common Stock by the Selling Shareholders. See "Selling
Shareholders."
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for each of the
years in the five-year period ended August 29, 1996. For the purpose of
calculating such ratios, "earnings" consist of income from continuing
operations before income taxes plus fixed charges and "fixed charges" consist
of interest expense (net of capitalized portion) and capitalized interest.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------
SEPT.
SEPT. 3, SEPT. 2, 1, AUG. 31, AUG. 29,
1992 1993 1994 1995 1996
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<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges... 6.3x 39.5x 131.1x 199.8x 159.0x
</TABLE>
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following statements with respect to the Debt Securities are summaries
of, and subject to, the detailed provisions of an indenture (the "Indenture")
entered into between the Company and Norwest Bank Minnesota, N.A., as trustee
(the "Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections or
defined terms of the Indenture are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein
by reference. Section and Article references used herein are references to the
Indenture.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described in such
Prospectus Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture does not limit the aggregate amount of Debt Securities which
may be issued thereunder and Debt Securities may be issued thereunder from
time to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Debt Securities will be
unsecured obligations of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the title of the Debt Securities; (2) any
limit on the aggregate principal amount of the Debt Securities; (3) the Person
to whom any interest on a Debt Security shall be payable, if other than the
person in whose name that Debt Security is registered on the Regular Record
Date; (4) the date or dates on which the principal of the Debt Securities will
be payable; (5) the rate or rates at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates are determined,
the date or dates from which such interest will accrue, the Interest Payment
Dates on which any such interest on the Debt Securities will be payable and
the Regular Record Date for any interest payable on any Interest Payment Date,
and the basis upon which interest will be calculated if other than that of a
360-day year of twelve 30-day months; (6) the place or places where the
principal of and any premium and interest on the Debt Securities will be
payable; (7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which the Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (8) the obligation of the
Company, if any, to redeem or repurchase the Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of the Holders and the
period or periods within which, the price or prices at which and the terms and
conditions upon which such Debt Securities shall be redeemed or purchased, in
whole or in part, pursuant to such obligation, and any provisions for the
remarketing of such Debt Securities; (9) the denominations in which any Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (10) the currency, currencies or currency units in
which payment of principal of and any premium and interest on any Debt
Securities shall be payable if other than United States dollars; (11) any
index, formula or other method used to determine the amount of payments of
principal of and any premium and interest on the Debt Securities; (12) if the
principal of or any premium or interest on any Debt Securities is to be
payable, at the election of the Company or the Holders, in one or more
currencies or currency units other than that or those in which such Debt
Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
such Debt Securities shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made; (13) if other
than the principal amount thereof, the portion of the principal amount of the
Debt Securities which will be payable upon
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declaration of the acceleration of the Maturity thereof; (14) the
applicability of any provisions described under "Defeasance"; (15) whether any
of the Debt Securities are to be issuable in permanent global form and, if so,
the Depositary or Depositaries for such Global Security and the terms and
conditions, if any, upon which interests in such Debt Securities in global
form may be exchanged, in whole or in part, for the individual Debt Securities
represented thereby; (16) the Security Registrar, if other than the Trustee,
and the entity who will be the Paying Agent; (17) any Events of Default, with
respect to the Debt Securities of such series, if not otherwise set forth
under "Events of Default"; (18) the terms and conditions, if any, pursuant to
which such Debt Securities are convertible into or exchangeable for Common
Stock or other securities; and (19) any other terms of the Debt Securities not
inconsistent with the provisions of the Indenture. (Section 301)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount from their principal amount. (Section 301)
United States Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the Prospectus Supplement relating thereto.
If any of the Debt Securities are sold for any foreign currency or currency
unit or if principal of, premium, if any, or interest, if any, on any of the
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other
information with respect to such Debt Securities and such foreign currency or
currency unit will be specified in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities
will be payable, and the exchange of and the transfer of Debt Securities will
be registrable, at the office or agency of the Company maintained for such
purpose and at any other office or agency maintained for such purpose.
(Sections 305 and 1002) Unless otherwise indicated in the applicable
Prospectus Supplement, the Debt Securities will be issued in denominations of
$1,000 or integral multiples thereof. (Section 302) No service charge will be
made for any registration of transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium, or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof.
(Section 1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part. (Section 305)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (a "Depositary") or its nominee identified in an
applicable Prospectus Supplement. In such a case, one or more Global
Securities will
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be issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by
the Depositary for such Global Security to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in any other circumstances
described in an applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in an applicable Prospectus Supplement. The Company expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on
behalf of the Depositary for such Global Security, the Depositary will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such depositary or its
nominee ("Participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Securities will be limited to Participants
or Persons that may hold interests through participants. Ownership of
beneficial interests by Participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through Participants will be shown on, and the transfer of that ownership
interest within such Participant will be effected only through, records
maintained by such Participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in an applicable Prospectus Supplement,
owners of beneficial interests in such Global Securities will not be entitled
to have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form, and will not
be considered the owners or Holders thereof for any purpose under the
Indenture. Accordingly, each person owning a beneficial interest in such
Global Security must rely on the procedures of the Depositary and, if such
Person is not a Participant, on the procedures of the Participant through
which such Person owns its interest, to exercise any rights of a Holder under
the Indenture. The Company understands that, under existing industry
practices, if the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under Indenture, the
Depositary would authorize the Participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
Participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in an applicable Prospectus Supplement.
Payment of principal of, and any premium or interest on, Debt Securities
registered in the name of or held by a Depository or its nominee will be
6
<PAGE>
made to the Depository or its nominee, as the case may be, as the registered
owner or the holder of the Global Security representing such Debt Securities.
None of the Company, the Trustee, any Paying Agent, or the Registrar for such
Debt Securities will have any responsibility or liability for any aspect of
the records relating to or payment made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising, or reviewing any records relating to such beneficial ownership
interests.
COVENANTS OF THE COMPANY
Except as otherwise provided in the applicable Prospectus Supplement with
respect to any series of Debt Securities, the Company is not restricted by the
Indenture from incurring, assuming or becoming liable for any type of debt or
other obligations, from paying dividends or making distributions on its
capital stock or purchasing or redeeming its capital stock. The Indenture does
not require the maintenance of any financial ratios or specified levels of net
worth or liquidity. In addition, the Indenture does not contain any provision
that would require the Company to repurchase or redeem or otherwise modify the
terms of any of its Debt Securities upon a change in control or other events
involving the Company which may adversely affect the creditworthiness of the
Debt Securities.
DEFEASANCE
Unless otherwise specified in a Prospectus Supplement applicable to a
particular series of Debt Securities, the Company, at its option, (i) will be
deemed to have been discharged from its obligations with respect to the Debt
Securities of such series (except for certain obligations, including
obligations to register the transfer or exchange of Debt Securities of such
series, to replace destroyed, stolen, lost, or mutilated Debt Securities of
such series, and to maintain an office or agency in respect of the Debt
Securities and hold moneys for payment in trust) or (ii) will be released from
its obligations to comply with the covenants that are under "Covenants of the
Company" above with respect to the Debt Securities of such series, and the
occurrence of an event described in clause (d) under "Events of Default" below
with respect to any defeased covenant and clauses (c) and (f) of the "Events
of Default" below will no longer be an Event of Default if, in either case,
the Company irrevocably deposits with the Trustee, in trust, money or direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or obligations of
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 at the
issuer's option ("U.S. Government Obligations") or certain depositary receipts
therefor that through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
all the principal of (and premium, if any) and any interest on the Debt
Securities of such series on the dates such payments are due in accordance
with the terms of such series on the dates such payments are due in accordance
with the terms of such Debt Securities. Such defeasance may be effected only
if, among other things, (a) no Event of Default or event which with the giving
of notice or lapse or time, or both, would become an Event of Default under
the Indenture shall have occurred and be continuing on the date of such
deposit, (b) no Event of Default described under clause (c) under "Events of
Default" below or event that with the giving of notice or lapse of time, or
both, would become an Event of Default described under such clause (d) shall
have occurred and be continuing at any time on or prior to the 90th calendar
day following such date of deposit, (c) in the event of defeasance under
clause (i) above, the Company has delivered an Opinion of Counsel, stating
that (1) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (2) since the date of the Indenture
there has been a change in applicable federal law, in either case to the
effect that, among other things, the Holders of the Debt Securities of such
series will not recognize gain or loss for United States federal income tax
purposes as a result of such deposit or defeasance and will be subject to
United States federal income tax in the same manner as if such defeasance had
not occurred, and (d) in the event
7
<PAGE>
of defeasance under clause (ii) above, the Company has delivered an Opinion of
Counsel to the effect that, among other things, the Holders of the Debt
Securities of such series will not recognize gain or loss for United States
federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States federal income tax in the same manner as if such
defeasance had not occurred. In the event the Company fails to comply with its
remaining obligations under the applicable Indenture after a defeasance of
such Indenture with respect to the Debt Securities of any series as described
under clause (ii) above and the Debt Securities of such series are declared
due and payable because of the occurrence of any undefeased Event of Default,
the amount of money and U.S. Government Obligations on deposit with the
Trustee may be insufficient to pay amounts due on the Debt Securities of such
series at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable in respect of such payments.
SATISFACTION AND DISCHARGE
The Company, at its option, may satisfy and discharge the Indenture (except
for certain obligations of the Company and the Trustee, including, among
others, the obligations to apply money held in trust) when (i) either (a) all
Debt Securities previously authenticated and delivered (other than (1) Debt
Securities that were destroyed, lost, or stolen and that have been replaced or
paid and (2) Debt Securities for the payment of which money has been deposited
in trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all such Debt Securities not theretofore
delivered to the Trustee for cancellation (1) have become due and payable, (2)
will become due and payable at their Stated Maturity within one year, or (3)
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name and at the expense of the Company, and the Company has
deposited or caused to be deposited with the Trustee as trust funds in trust
for such purpose an amount sufficient to pay and discharge the entire
indebtedness on such Debt Securities not previously delivered to the Trustee
for cancellation, for principal and any premium and interest to the date of
such deposit (in the case of Debt Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be,
(ii) the Company has paid or caused to be paid all other sums payable under
the Indenture by the Company, and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent relating to the satisfaction and discharge of
the Indenture have been satisfied.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (a) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (b) failure
to pay principal of or any premium on any Debt Security of that series when
due; (c) failure to deposit any sinking fund payment, when due, in respect of
any Debt Security of that series; (d) failure to perform any other covenant of
the Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization involving the
Company; and (f) any other Event of Default provided with respect to Debt
Securities of that series. (Section 501) Pursuant to the Trust Indenture Act,
the Trustee is required, within 90 calendar days after the occurrence of a
default in respect of any series of Debt Securities, to give to the Holders of
the Debt Securities of such series notice of all such uncured defaults known
to it (except that, in the case of a default in the performance of any
covenant of the character contemplated in clause (d) of the preceding
sentence, no such notice to Holders of the Debt Securities of such Series will
be given until at least 30 calendar days after the occurrence thereof), except
that, other than in the case of a default
8
<PAGE>
of the character contemplated in clause (a), (b), or (c) of the preceding
sentence, the Trustee may withhold such notice if and so long as it in good
faith determines that the withholding of such notice is in the interests of
the Holders of the Debt Securities of such series.
The Indenture provides that, subject to the duty of the Trustee thereunder
during an Event of Default to act with the required standard of care, the
Trustee is under no obligation to exercise any of its rights or powers under
the Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Sections 601
and 603) Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the Holders of a majority in principal amount
of the Outstanding Debt Securities of any series have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the Debt Securities of that series. (Section 512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, a brief certificate from the
principal executive, financial or accounting officer of the Company as to his
or her knowledge of the Company's compliance (without regard to any period of
grace or requirement of notice) with all conditions and covenants of the
Indenture. (Section 1004)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25% in principal amount of the Outstanding Debt Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Debt Securities of that series to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment
or decree for payment of money has been obtained by the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
If an Event of Default under clause (e) above occurs, then the principal of,
premium on, if any, and accrued interest on the Debt Securities of that series
will become immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder of the Debt Securities of that
series. (Section 502)
No Holder of any Debt Security of any series has any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Section 507)
However, such limitations generally do not apply to a suit instituted by a
Holder of a Debt Security for the enforcement of payment of the principal or
interest on such Debt Security on or after the respective due dates expressed
in such Debt Security. (Section 508)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (b)
reduce the principal amount of, rate of interest on or any premium
9
<PAGE>
payable upon the redemption of any Debt Security, (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (d) change the Place of Payment where, or the coin or
currency in which, any Debt Security or any premium or interest thereon is
payable, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security after the Stated Maturity,
Redemption Date or Repayment Date, (f) reduce the percentage in principal
amount of Outstanding Debt Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults, or (g) modify any of the provisions set forth in this
paragraph except to increase any such percentage or to provide that certain
other provisions of the Indenture may not be modified or waived without the
consent of the Holder of each Outstanding Debt Security affected thereby.
(Section 902)
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of the Holders of all the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1011) The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of each series may, on behalf of all
Holders of Debt Securities of that series and any coupons appertaining
thereto, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default (a) in the payment of principal of
or any premium or interest on any Debt Security of such series or (b) in
respect of a covenant or provision of the Indenture which cannot be modified
or amended without the consent of the Holder of each Outstanding Debt Security
of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof, (ii) the principal amount of a Debt
Security denominated in other than U.S. dollars shall be the U.S. dollar
equivalent, determined on the date of original issuance of such Debt Security,
of the principal amount of such Debt Security (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the date of original
issuance of such Debt Security of the amount determined as provided in (i)
above of such Debt Security) and (iii) Debt Securities owned by the Company or
any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under
the laws of any domestic jurisdiction, provided that any successor Person
expressly assumes the Company's obligations on the Debt Securities and under
the Indenture and that, after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time, would become an
Event of Default, shall have occurred and be continuing, and that certain
other conditions are met. (Section 801)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Debt
Securities will be given by mail to the addresses of such Holders as they
appear in the Debt Security Register. (Section 106)
10
<PAGE>
TITLE
Prior to due presentment of a Debt Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of principal of and any
premium and any interest (other than Defaulted Interest or as otherwise
provided in the applicable Prospectus Supplement) on such Debt Security and
for all other purposes whatsoever, whether or not such Debt Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. (Section 308)
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the
Company at the expense of the Holder upon delivery to the Trustee of the Debt
Security or evidence of the destruction, loss or theft thereof satisfactory to
the Company and the Trustee. In the case of a destroyed, lost or stolen Debt
Security, an indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Debt Security before a
replacement Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. (Section 613) The
Trustee is permitted to engage in other transactions; however, if it acquires
any conflicting interest and there is a default under the Debt Securities of
any series for which the Trustee serves as trustee, the Trustee must eliminate
such conflict or resign. (Section 608)
The Trustee currently provides certain banking and financial services to the
Company in the ordinary course of business and may provide other such services
in the future.
11
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 150,000,000 shares,
$.01 par value per share ("Common Stock"). The authorized capital stock is
divisible into classes and series, has designations, voting rights and other
rights and preferences, and is subject to restrictions that the Board of
Directors may from time to time establish. Unless otherwise established by the
Board of Directors, all shares of capital stock issued by the Company are
designated as Common Stock. As of August 29, 1996, 92,473,017 shares of Common
Stock were issued and outstanding and no shares of preferred stock were
designated, issued or outstanding. The following summary is qualified in its
entirety by reference to the Company's Articles of Incorporation and Bylaws.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the shareholders and are not entitled to cumulative voting in
the election of directors. Subject to any preferences granted to holders of
any future preferred stock or any other senior equity, holders of Common Stock
are entitled to receive dividends when, as and if declared by the Board of
Directors, and to share ratably in the assets of the Company legally available
for distribution to its shareholders in the event of liquidation, dissolution
and winding up of the Company. Holders of Common Stock have no preemptive,
subscription, redemption or conversion rights with respect to Common Stock.
All outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
The rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that may
be issued in the future. Any such issuance may adversely affect the interests
of holders of the Common Stock by limiting the control which such holders may
exert by exercise of their voting rights, by subordinating their rights in
liquidation to the rights of the holders of the preferred stock of the Company
and otherwise. In addition, the issuance of preferred stock of the Company
may, in some circumstances, deter or discourage takeover attempts and other
changes in control of the Company, including takeovers and changes in control
which some holders of the Common Stock may deem to be in their best interests
and in the best interests of the Company, by making it more difficult for a
person who has gained a substantial equity interest in the Company to obtain
voting control or to exercise control effectively. The Company has no current
plans or agreements with respect to the issuance of any shares of preferred
stock.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is Norwest Bank
Minnesota, N.A.
SELLING SHAREHOLDERS
The shareholders of the Company named in the table below (the "Selling
Shareholders") may from time to time offer shares of Common Stock of the
Company. The only Securities that may be offered by the Selling Shareholders
are shares of Common Stock, which together have an aggregate initial public
offering price of up to $250,000,000. Each Prospectus Supplement will name
each Selling Shareholder (if any) offering shares thereby, indicate the nature
of any position, office or other material relationship which the Selling
Shareholder has had within the past three years with the Company or any of its
predecessors or affiliates, and state the number of shares of Common Stock
owned by the Selling Shareholder prior to the offering, the number of shares
of Common Stock offered by the Selling Shareholder pursuant to the Prospectus
Supplement and the number of shares of Common Stock and the percentage (if one
percent or more) of the outstanding Common Stock owned by the Selling
Shareholder after the offering.
12
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF SEPTEMBER 27,
1996
-------------------------
PERCENT
NAME OF BENEFICIAL OWNER NUMBER OF OUTSTANDING
------------------------ ---------- --------------
<S> <C> <C>
Micron Technology, Inc. (1)........................... 73,312,863 79.3%
8000 South Federal Way
Boise, Idaho 83707
Joseph M. Daltoso (2)................................. 1,075,234 1.2%
T. Erik Oaas (3)...................................... 635,357 *
Gregory D. Stevenson (4).............................. 635,357 *
Robert F. Subia (5)................................... 95,783 *
Brian C. Klene (6).................................... 1,093 *
George A. Haneke (7).................................. 166,438 *
Nelson L. Hanks (8)................................... 500 *
Dean A. Klein (9)..................................... 8,759 *
Gene P. Thomas, Jr. (10).............................. 194,438 *
Jess Asla (11)........................................ 294,090 *
</TABLE>
- --------
* Less than one percent (1%).
(1) Micron Technology, Inc. is the parent of the Company. Four directors of
the Company are currently also directors of Micron Technology, Inc.
(2) Mr. Daltoso is the Chairman of the Board, President and Chief Executive
Officer of the Company.
(3) Mr. Oaas is the Vice President, Finance, Chief Financial Officer and a
director of the Company.
(4) Mr. Stevenson is the Executive Vice President, Operations and a director
of the Company.
(5) Mr. Subia is the Chairman of the Board, President and Chief Executive
Officer of Micron Custom Manufacturing Services, Inc., a wholly-owned
subsidiary of the Company. Mr. Subia is also a director of the Company.
(6) Mr. Klene is the Executive Vice President, Sales and Marketing of the
Company.
(7) Mr. Haneke is the Vice President, Chief Information Officer of the
Company.
(8) Mr. Hanks is the Vice President, Purchasing of the Company.
(9) Mr. Klein is the Vice President, Chief Technical Officer of the Company.
(10) Mr. Thomas is the Vice President, Marketing of the Company.
(11) Mr. Asla is the Vice President, Operations of Micron Custom Manufacturing
Services, Inc., a wholly-owned subsidiary of the Company.
13
<PAGE>
PLAN OF DISTRIBUTION
The Company and the Selling Shareholders may sell the Securities separately
or together, (i) to one or more underwriters or dealers for public offering
and sale by them and (ii) to investors directly or through agents. The
distribution of the Securities may be effected from time to time in one or
more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
thereby.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company and/or the Selling
Shareholders or from purchasers of the Securities for whom they may act as
agents, in the form of discounts, concessions or commissions. The
underwriters, dealers or agents which participate in the distribution of the
Securities may be deemed to be underwriters under the Securities Act and any
discounts or commissions received by them and any profit on the resale of the
Securities received by them may be deemed to be underwriting discounts and
commissions thereunder. Any such underwriter, dealer or agent will be
identified and any such compensation received from the Company or the Selling
Shareholders will be described in the Prospectus Supplement. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company and/or
the Selling Shareholders against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the underwriters, dealers or agents may be required to make in
respect thereof.
The Company and/or the Selling Shareholders may grant underwriters who
participate in the distribution of Securities an option to purchase additional
Securities to cover over-allotments, if any.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the
Company for public offering and sale may make a market in such securities, but
such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any Securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with or perform services for the Company or the
Selling Shareholders in the ordinary course of business.
LEGAL OPINIONS
The validity of the Securities is being passed upon for the Company and the
Selling Shareholders by Wilson Sonsini Goodrich & Rosati, a Professional
Corporation, Palo Alto, California.
EXPERTS
The balance sheets of Micron Electronics, Inc. as of August 29, 1996 and
August 31, 1995 and the statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended August 29, 1996
incorporated herein by reference to the Annual Report on Form 10-K of Micron
Electronics, Inc. for the year ended August 29, 1996 have been so incorporated
in reliance upon the reports of Coopers & Lybrand, L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than any underwriting
discount and commissions, in connection with the issuance and distribution of
the Securities being registered.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Registration fee................................................. $ 98,485
Nasdaq National Market fee....................................... 17,500
Trustee's fees and expenses...................................... 15,000*
Accounting fees and expenses..................................... 100,000*
Printing and engraving........................................... 50,000*
Transfer agent and registrar fees and expenses................... 15,000*
Blue Sky and legal investment fees and expenses.................. 15,000*
Legal fees and expenses of the registrant........................ 175,000*
Miscellaneous.................................................... 14,015*
---------
Total........................................................ $ 500,000*
=========
</TABLE>
- --------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521, subd. 2, of the Minnesota Business Corporation Act (the
"Minnesota Act") requires the registrant to indemnify a person made or
threatened to be made a party to a proceeding by reason of the former or
present official capacity of the person with respect to the registrant,
against judgments, penalties, fines, including, without limitation, excise
taxes assessed against the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions complained of in the proceeding, the
person: (1) has not been indemnified by another organization or employee
benefit plan for the same judgments, penalties or fines; (2) acted in good
faith; (3) received no improper personal benefit, and statutory procedure has
been followed in the case of any conflict of interest by a director; (4) in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (5) in the case of acts or omissions occurring in
the person's performance in the official capacity of director or, for a person
not a director, in the official capacity of officer, board committee member or
employee, reasonably believed that the conduct was in the best interests of
the registrant or, in the case of performance by a director, officer or
employee of the registrant involving service as a director, officer, partner,
trustee, employee or agent of another organization or employee benefit plan,
reasonably believed that the conduct was not opposed to the best interest of
the registrant. In addition, Section 302A.521, subd. 3 of the Minnesota Act
requires payment by the registrant upon written request of reasonable expenses
in advance of final disposition of the proceeding in certain instances. A
decision as to required indemnification is made by a disinterested majority of
the registrant's Board of Directors present at a meeting at which a
disinterested quorum is present, or by a designated committee of the Board, by
special legal counsel, by the shareholders, or by a court.
Provisions regarding limitation of the liability of the directors of the
registrant are contained in Article 8 of the registrant's Restated Articles of
Incorporation, as amended to date, and provisions regarding indemnification of
directors and officers of the registrant are contained in Article IX of the
registrant's Bylaws. In addition, the registrant has indemnification
agreements with its directors and officers that require the registrant to
indemnify its directors and officers under certain conditions.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to this Registration Statement for certain provisions regarding
indemnification of officers and directors of the registrant by the several
Underwriters.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement (Common Stock)
1.2 Form of Underwriting Agreement (Debt Securities)
4.1 Form of Indenture
4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
12.1 Computation of Ratio of Earnings to Fixed Charges*
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1)
24.1 Powers of Attorney of certain directors and officers of the Company
(contained on Page II-4)*
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Norwest Bank Minnesota, N.A**
</TABLE>
- --------
* Previously filed.
** To be filed on a delayed basis pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939, as amended, and 17 CFR (S)(S)260.5b1-5b3.
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above shall not apply if the information required to be included in a post-
effective amendment by these clauses is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
2. The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
3. Insofar as indemnification of liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
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 Act
and will be governed by the final adjudication of such issue.
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus 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.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
MICRON ELECTRONICS, INC., A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS
OF MINNESOTA, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NAMPA, STATE OF
IDAHO, ON THE 18TH DAY OF OCTOBER, 1996.
Micron Electronics, Inc.
/s/ T. Erik Oaas
By___________________________________
T. ERIK OAAS
VICE PRESIDENT OF FINANCE
AND CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Form S-3 Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
* Chairman of the October 18,
- ------------------------------------- Board, Chief 1996
Executive Officer
JOSEPH M. DALTOSO and President
/s/ T. Erik Oaas Vice President of October 18,
- ------------------------------------- Finance, Chief 1996
Financial Officer
T. ERIK OAAS and Director
(Principal
Financial and
Accounting Officer)
* Executive Vice October 18,
- ------------------------------------- President, 1996
Operations,
GREGORY D. STEVENSON Director
* Director, Chairman, October 18,
- ------------------------------------- President and Chief 1996
Executive Officer
ROBERT F. SUBIA of Micron Custom
Manufacturing
Services, Inc.
* Director October 18,
- ------------------------------------- 1996
STEVEN R. APPLETON
* Director October 18,
- ------------------------------------- 1996
JERRY M. HESS
II-4
<PAGE>
* Director October 18,
- ------------------------------------- 1996
ROBERT A. LOTHROP
* Director October 18,
- ------------------------------------- 1996
JOHN R. SIMPLOT
* /s/ T. Erik Oaas October 18,
- ------------------------------------- 1996
T. ERIK OAAS
ATTORNEY-IN-FACT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT TABLE NUMBER
------- ------------- ------
<C> <S> <C>
1.1 Form of Underwriting Agreement (Common Stock)
1.2 Form of Underwriting Agreement (Debt Securities)
4.1 Form of Indenture
4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation
12.1 Computation of Ratio of Earnings to Fixed Charges*
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)
24.1 Powers of Attorney of certain directors and officers of the
Company (contained on Page II-4)*
25.1 Form of T-1 Statement of Eligibility and Qualification under
Trust Indenture Act of 1939**
</TABLE>
- --------
* Previously filed.
** To be filed on a delayed basis pursuant to Section 305(b)(2) of the Trust
Indenture Act of 1939, as amended, and 17 CFR (S)(S)260.5b1-5b3.
<PAGE>
EXHIBIT 1.1
MICRON ELECTRONICS, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
----------------------
UNDERWRITING AGREEMENT
----------------------
,19..
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Micron Electronics, Inc., a Minnesota corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its Common Stock, par value $0.01 per
share, (the "Shares") of the Company and the shareholders of the Company, if
any, named in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Firm Shares",) pursuant to terms specified in Schedule
III to such Pricing Agreement. If specified in such Pricing Agreement, the
Company and the Selling Shareholders, if any, may grant to the Underwriters the
right to purchase at their election an additional number of shares, specified in
such Pricing Agreement as provided in Section 3 hereof (the "Optional Shares").
The Firm Shares and the Optional Shares, if any, which the Underwriters elect to
purchase pursuant to Section 3 hereof are herein collectively called the
"Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall be as
specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to the
Underwriters of such Shares, for whom the firms designated as representatives of
the Underwriters of such Shares in the Pricing Agreement relating thereto will
act as representatives (the "Representatives"). The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
This Underwriting Agreement shall not be construed as an obligation of the
Company to sell any of the Shares or as an obligation of any of the Underwriters
to purchase any of the Shares. The obligation of the Company to issue and sell
any of the Shares and the obligation of any of the Underwriters to purchase any
of
<PAGE>
the Shares shall be evidenced by the Pricing Agreement with respect to the
Designated Shares specified therein. Each Pricing Agreement shall specify the
names of Selling Shareholders, if any, the aggregate number of the Firm Shares,
the maximum number of Optional Shares, if any, the initial public offering price
of such Firm and Optional Shares or the manner of determining such price, the
purchase price to the Underwriters of such Designated Shares, the names of the
Underwriters of such Designated Shares, the names of the Representatives of such
Underwriters, the number of such Designated Shares to be purchased by each
Underwriter and the commission, if any, payable to the Underwriters with respect
thereto and shall set forth the date, time and manner of delivery of such Firm
and Optional Shares, if any, and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. (a) The Company and Micron Technologies, Inc. ("Parent") represent
and warrant to, and agree with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-....) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to the Initial Registration Statement, but including all
documents incorporated by reference in the prospectus included therein, to
the Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; no other document with respect to
the Initial Registration Statement or document incorporated by reference
therein has heretofore been filed, or transmitted for filing, with the
Commission other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which
became effective upon filing, (and other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the Act
each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, each
as amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration Statement";
the prospectus relating to the Shares, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary
2
<PAGE>
Prospectus or Prospectus, as the case may be; any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus
as amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares in
the form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(ii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives or by a Selling Shareholder expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(iii) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, 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;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives or by a Selling Shareholder
expressly for use in the Prospectus as amended or supplemented relating to
such Shares;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the
3
<PAGE>
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(v) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Minnesota,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(vi) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and non-
assessable;
(vii) The Shares have been duly and validly authorized, and, when the
Firm Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares and, in the case of
any Optional Shares, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated Shares will
be duly and validly issued and fully paid and non-assessable; the Shares
conform to the description thereof contained in the Registration Statement
and the Designated Shares will conform to the description thereof contained
in the Prospectus as amended or supplemented with respect to such Designated
Shares;
(viii) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing Agreement
and each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the Company
or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, except such as have been, or will
have been prior to each Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(ix) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
4
<PAGE>
(x) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(xi) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the stock, and under the caption "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xii) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(xiii) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(xiv) Coopers & Lybrand, L.L.P., who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xv) The Company and its subsidiaries own or possess or can acquire
on commercially reasonable terms adequate licenses or other rights to use
all patents, trademarks, service marks, trade names, copyrights, mask work
rights, technology and know-how necessary to conduct the business now or
proposed to be conducted by the Company and its subsidiaries as described in
the Prospectus, and except as disclosed in the Prospectus the Company has
not received any notice of infringement of or conflict with (and knows of no
such infringement of or conflict with) asserted rights of others with
respect to any patents, trademarks, service marks, trade names, copyrights,
mask work rights or know-how which could result in any material adverse
effect upon the Company and its subsidiaries; and, except as disclosed in
the Prospectus, the discoveries, inventions, products or processes of the
Company and its subsidiaries referred to in the Prospectus do not, to the
Company's knowledge, infringe or conflict with any right or patent of any
third party or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company; and
(xvi) The Company and its subsidiaries have obtained any permits,
consents and authorizations required to be obtained by them under laws or
regulations relating to the protection of the environment or concerning the
handling, storage, disposal or discharge of toxic materials (collectively
"Environmental Laws"), and any such permits, consents and authorizations
remain in full force and effect. The Company and its subsidiaries are in
compliance with the Environmental Laws in all material respects, and there
is no pending or, to the Company's knowledge, threatened, action or
proceeding against the Company and its subsidiaries alleging violations of
the Environmental laws.
(b) Each of the Selling Shareholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement,
the Pricing Agreement and the
5
<PAGE>
Power of Attorney and the Custody Agreement hereinafter referred to, and for
the sale and delivery of the Shares to be sold by such Selling Shareholder
under the Pricing Agreement, have been obtained; and such Selling
Shareholder has full right, power and authority to enter into this
Agreement, the Pricing Agreement, the Power-of-Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Shareholder under the Pricing Agreement;
(ii) The sale of the Shares to be sold by such Selling Shareholder
under the Pricing Agreement and the compliance by such Selling Shareholder
with all of the provisions of this Agreement; the Pricing Agreement, the
Power of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder is bound or to
which any of the property or assets of such Selling Shareholder is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of such Selling Shareholder if such
Selling Shareholder is a corporation, or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Shareholder or the property of such Selling Shareholder;
(iii) Such Selling Shareholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling Shareholder
will have, good and valid title to the Shares to be sold by such Selling
Shareholder under the Pricing Agreement, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant thereto, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters;
(iv) During the period beginning from the date of the Pricing
Agreement and continuing to and including the date 90 days after the date of
such Pricing Agreement, not to offer, sell contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the Company that
are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding
as of, the date of the Pricing Agreement for such Designated Shares),
without the prior written consent of the Representatives;
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus, when they
become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act and the
rules and regulations of the Commission thereunder and will
6
<PAGE>
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof);
(viii) Certificates in negotiable form representing all of the
Designated Shares to be sold by such Selling Shareholder under the Pricing
Agreement for such Designated Shares have been placed in custody under a
Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Shareholder to
[Name of Custodian], as custodian (the "Custodian"), and such Selling
Shareholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II to the Pricing Agreement, and each of them,
as such Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact")
with authority to execute and deliver this Agreement and the Pricing
Agreement on behalf of such Selling Shareholder, to determine the purchase
price to be paid by the Underwriters to the Selling Shareholders as provided
in Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Shareholder thereunder and otherwise to act on behalf of such
Selling Shareholder in connection with the transactions contemplated by this
Agreement, the Pricing Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Shareholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by
the occurrence of any other event; if any individual Selling Shareholder or
any such executor or trustee should die or become incapacitated, or if any
such estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, certificates representing the
Shares shall be delivered by or on behalf of the Selling Shareholders in
accordance with the terms and conditions of this Agreement, the Pricing
Agreement and of the Custody Agreements; and actions taken by the Attorneys-
in-Fact pursuant to the Powers of Attorney shall be as valid as if such
death, incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or any of
them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
7
<PAGE>
The Company and the Selling Shareholders, if any, as and to the extent
indicated in Schedule II to the Pricing Agreement may specify in the Pricing
Agreement applicable to any Designated Shares that the Company, and/or the
Selling Shareholders, if any, thereby grant to the Underwriters the right (an
"Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares shall be
made [in proportion to the maximum number of Optional Shares to be sold by the
Company and each Selling Shareholder as set forth in Schedule II to the Pricing
Agreement] [initially with respect to the Optional Shares to be sold by the
Company and then among the Selling Shareholders in proportion to the maximum
number of Optional Shares to be sold by each Selling Shareholder as set forth in
Schedule II to the Pricing Agreement.] Any such election to purchase Optional
Shares may be exercised by written notice from the Representatives to the
Company and the Attorneys-in-Fact, given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by the Representatives but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless the Representatives and the
Company and the Selling Shareholders, if any, otherwise agree in writing,
earlier than or later than the respective number of business days after the date
of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company and the Attorneys-in-Fact, if any,
have been advised by the Representatives have been attributed to such
Underwriter; provided that, if the Company and the Attorneys-in-Fact, if any,
have not been so advised, the number of Optional Shares to be so added shall be,
in each case, that proportion of Optional Shares which the number of Firm Shares
to be purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Shares (rounded as the Representatives may determine to
the nearest 100 shares). The total number of Designated Shares to be purchased
by all the Underwriters pursuant to such Pricing Agreement shall be the
aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company and Selling
Shareholders, if any, shall be delivered by or on behalf of the Company and
Selling Shareholders, if any, to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Company and [the Custodian, if any] [each of the Selling
Shareholders, if any] as their interests may appear, in the funds specified in
such Pricing Agreement, (i) with respect to the Firm Shares, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Representatives and the Company and
Selling Shareholders, if any, may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company and Selling Shareholders, if
any, may agree upon in writing, such time and date, if not
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<PAGE>
the First Time of Delivery, herein called the "Second Time of Delivery". Each
such time and date for delivery is herein called a "Time of Delivery".
5. The Company and Parent agree with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Shares or, if applicable, such earlier
time as may be required by Rule 424(b); to make no further amendment or any
supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such Shares
and prior to any Time of Delivery for such Shares which shall be disapproved
by the Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after any Time of Delivery for such Shares and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Shares, and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance by
the Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of such Shares, provided
that in connection therewith the Company shall not be required to qualify as
a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of the Pricing Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City
as amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Shares and if at such
time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be
9
<PAGE>
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify
the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option
of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
and continuing to and including the date 90 days after the date of such
Pricing Agreement, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any securities of the Company that are
substantially similar to the Designated Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing on,
or upon the conversion of convertible or exchangeable securities outstanding
as of, the date of the Pricing Agreement for such Designated Shares) without
the prior written consent of the Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of the
Pricing Agreement, and the Company shall at the time of filing either pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company and each of the Selling Shareholders, if any, covenant and
agree with one another and with the several Underwriters that (a) the Company
and such Selling Shareholder, if any, will pay or cause to be paid [a pro rata
share (based on the number of Shares to be sold by the Company such Selling
Shareholder hereunder] [, with the number to be sold by . and . to be included,
for purposes of this cause (a), in the number of Shares to be sold by the
Company) of] the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Blue Sky Memorandum, closing documents (including
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey(s); (iv) all fees and expenses in connection
with listing the Designated Shares on the Nasdaq National Market ("Nasdaq"); and
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required reviews by the National
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<PAGE>
Association of Securities Dealers, Inc. of the terms of the sale of the Shares;
and (b) the Company will pay or cause to be paid: (i) the cost of preparing
certificates for the Shares; (ii) the cost and charges of any transfer agent or
registrar or dividend disbursing agent; and (iii) all other costs and expenses
incident to the performance of its obligations hereunder and under any Over-
allotment Options which are not otherwise specifically provided for in this
Section[.] [; and (c) such Selling Shareholder, if any, will pay or cause to be
paid all costs and expenses incident to the performance of such Selling
Shareholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Shareholder, (ii) such Selling Shareholder's pro rata share of the
fees and expenses of the Attorneys-in-Fact and the Custodian, and (iii) all
expenses and taxes incident to the sale and delivery of the Shares to be sold by
such Selling Shareholder to the Underwriters hereunder.] It is understood,
however, that [the Company shall bear, and the Selling Shareholders shall not be
required to pay or to reimburse the Company for, the cost of any other matters
not directly relating to the sale and purchase of the Shares pursuant to the
Pricing Agreement, and that,] except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company, Parent and of the Selling
Shareholders, if any, in or incorporated by reference in the Pricing Agreement
relating to such Designated Shares are, at and as of each Time of Delivery for
such Designated Shares, true and correct, the condition that the Company, Parent
and the Selling Shareholders, if any, shall have performed all of their
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Shares shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of the Pricing Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion is
attached as Annex III(a) hereto), dated each Time of Delivery for such
Designated Shares, with respect to the matters covered in paragraphs (i),
(ii), (iv), (viii), (ix) and (x) of subsection (c) below as well as such
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Counsel for the Company satisfactory to the Representatives shall
have furnished to the Representatives their written opinions (a draft of
each such opinion is attached as Annex III(b) hereto), dated each Time of
Delivery for such Designated Shares, respectively, in form and substance
satisfactory to the Representatives, to the effect that:
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<PAGE>
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company (including the Designated Shares being
delivered at such Time of Delivery) have been duly and validly authorized
and issued and are fully paid and non-assessable; and the Designated Shares
conform to the description thereof in the Prospectus as amended or
supplemented;
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries; and to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Shares have been duly authorized, executed and delivered by the
Company;
(v) The issue and sale of the Designated Shares being delivered at
such Time of Delivery and the compliance by the Company with all of the
provisions of this Agreement and the Pricing Agreement with respect to the
Designated Shares and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
the Company or any of its properties;
(vi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Shares being delivered at
such Time of Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement, except such as
have been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(vii) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound;
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<PAGE>
(viii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(ix) The Company is not an "Investment Company" or an entity
"controlled" by an "Investment Company", as such terms are defined in the
Investment Company Act;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became effective
under the Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xi) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion), comply as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder; although they do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except
for those referred to in the opinion in subsection (viii) of this Section
7(c), they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
or that, as of such Time of Delivery, either the Registration Statement or
the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference
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<PAGE>
into the Prospectus as amended or supplemented or required to be described
in the Registration Statement or the Prospectus as amended or supplemented
which are not filed or incorporated by reference or described as required;
(d) ., patent counsel for the Company and Parent, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex
III(c) hereto) dated each Time of Delivery for such Designated Shares, in
form and substance satisfactory to you, to the effect that:
(i) Such counsel does not know of any pending or threatened legal or
governmental proceeding relating to patents of the Company or others, to
which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries are subject which,
if determined adversely to the Company or any of its subsidiaries, would be
reasonably likely to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries;
(ii) Such counsel has no knowledge of any infringement or any alleged
infringement by the Company or any of its subsidiaries of patent rights of
others which would be reasonably likely to have a material adverse effect on
the business, financial condition or results of operations of the Company
and its subsidiaries; and
(iii) The statements set forth in the Prospectus under the caption
["Risk Factors -- Intellectual Property Matters" and "Business --Patents and
Licenses,"] insofar as they purport to constitute a summary of the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(e) The respective counsel for each of the Selling Shareholders, if
any, as indicated in Schedule II to the Pricing Agreement, each shall have
furnished to you their written opinion with respect to each of the Selling
Shareholders for whom they are acting as counsel, dated each Time of
Delivery for such Designated Shares, in form and substance satisfactory to
you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Shareholder and constitute valid and
binding agreements of such Selling Shareholder in accordance with their
terms;
(ii) This Agreement and the Pricing Agreement have been duly executed
and delivered by or on behalf of such Selling Shareholder; and the sale of
the Designated Shares to be sold by such Selling Shareholder hereunder and
the compliance by such Selling Shareholder with all of the provisions of
this Agreement, the Pricing Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Shareholder if such Selling
Shareholder is a corporation or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
such Selling Shareholder or the property of such Selling Shareholder;
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<PAGE>
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the Pricing Agreement in
connection with the Designated Shares to be sold by such Selling Shareholder
hereunder or thereunder, except [name any such consent, approval,
authorization or order] which [has] [have] been duly obtained and [is] [are]
in full force and effect, such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Designated Shares by the
Underwriters;
(iv) Immediately prior to such Time of Delivery, such Selling
Shareholder had good and valid title to the Designated Shares to be sold at
such Time of Delivery by such Selling Shareholder under this Agreement and
the Pricing Agreement, free and clear of all liens, encumbrances, equities
or claims, and full right, power and authority to sell, assign, transfer and
deliver the Designated Shares to be sold by such Selling Shareholder
hereunder or thereunder; and
(v) Good and valid title to such Designated Shares, free and clear of
all liens, encumbrances, equities or claims, has been transferred to each of
the several Underwriters who have purchased such Designated Shares in good
faith and without notice of any such lien, encumbrance, equity or claim or
any other adverse claim within the meaning of the Uniform Commercial Code.
In rendering the opinion in paragraph (iv), such counsel may rely upon
a certificate of such Selling Shareholder in respect of matters of fact as
to ownership of, and liens, encumbrances, equities or claims on, the
Designated Shares sold by such Selling Shareholder, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such certificate.
(f) On the date of the Pricing Agreement for such Designated Shares
and at each Time of Delivery for such Designated Shares, the independent
accountants of the Company who have certified the financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the date
of the most recent report filed with the Commission containing financial
statements and incorporated by reference in the Registration Statement, if
the date of such report is later than such effective date, and a letter
dated such Time of Delivery, respectively, to the effect set forth in Annex
II hereto, and with respect to such letter dated such Time of Delivery, as
to such other matters as the Representatives may reasonably request and in
form and substance satisfactory to the Representatives (the executed copy of
the letter delivered prior to the execution of the Pricing Agreement is
attached as Annex II(a) hereto and a draft of the form of letter to be
delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex
II(b) hereto);
(g) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as amended prior to the date
of the Pricing Agreement relating to the Designated Shares any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, and (ii) since the
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respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Shares there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Prospectus as amended prior to the date of
the Pricing Agreement relating to the Designated Shares, the effect of
which, in any such case described in Clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as amended relating to the Designated Shares;
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Company's debt securities or preferred stock;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange or on Nasdaq; (ii) a suspension or material
limitation in trading in the Company's securities on Nasdaq; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York or California State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Shares or Optional Shares or both on the terms and in
the manner contemplated in the Prospectus as first amended or supplemented
relating to the Designated Shares;
(j) The Shares at each Time of Delivery shall have been duly listed
for quotation on Nasdaq;
(k) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each officer, director and 5%
shareholder of the Company substantially to the effect set forth in
Subsection 2(b)(iv) hereof in form and substance satisfactory to you;
(l) The Company and the Selling Shareholders, if any, shall have
furnished or caused to be furnished to the Representatives at each Time of
Delivery for the Designated Shares certificates of officers of the Company
and of the Selling Shareholders, if any, respectively, satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company and the Selling Shareholders, if any, herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (f) of this Section and
as to such other matters as the Representatives may reasonably request;
(m) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement; and
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(n) The Company shall not have received any notice of infringement of
or conflict with asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights, mask work rights,
technology or know-how which individually or in the aggregate, could have a
material adverse effect on the Company.
8. (a) The Company, Parent and each of the Selling Shareholders, if any,
jointly and severally, will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company, Parent
and the Selling Shareholders shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Shareholder, if any, against any losses, claims, damages or
liabilities to which the Company, may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company and each Selling Shareholder for any
legal or other expenses reasonably incurred by the Company or such Selling
Shareholder in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
17
<PAGE>
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include
any statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters of the Designated Shares
on the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Shareholders on
the one hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from such offering (before deducting expenses)
received by the Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Shareholders on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company, each of the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even
if the Underwriters were treated as
18
<PAGE>
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Shares in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint.
(e) The obligations of the Company and the Selling Shareholders under
this Section 8 shall be in addition to any liability which the Company and
the respective Selling Shareholders may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company or any Selling
Shareholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter the Representatives do not arrange for the
purchase of such Firm Shares or Optional Shares, as the case may be, then the
Company and the Selling Shareholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Shares on such terms. In
the event that, within the respective prescribed period, the Representatives
notify the Company and the Selling Shareholders that they have so arranged for
the purchase of such Shares, or the Company and the Selling Shareholders notify
the Representatives that they have so arranged for the purchase of such Shares,
the Representatives or the Company and the Selling Shareholders shall have the
right to postpone a Time of Delivery for such Shares for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed
19
<PAGE>
one-eleventh of the aggregate number of the Firm Shares or Optional Shares,
as the case may be, to be purchased at the respective Time of Delivery, then
the Company and the Selling Shareholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Shares or
Optional Shares, as the case may be, which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Shares and,
in addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the number of Firm Shares or Optional Shares, as the
case may be, which such Underwriter agreed to purchase under such Pricing
Agreement) of the Firm Shares or Optional Shares, as the case may be, of
such defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company and the
Selling Shareholders as provided in subsection (a) above, the aggregate
number of Firm Shares or Optional Shares, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm Shares
or Optional Shares, as the case may be, to be purchased at the respective
Time of Delivery, as referred to in subsection (b) above, or if the Company
and the Selling Shareholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters, then the Pricing Agreement relating to such Firm Shares or
the Over-allotment Option relating to such Optional Shares, as the case may
be, shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Shareholders, except
for the expenses to be borne by the Company and the Selling Shareholders and
the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Shareholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Shareholder, and shall survive delivery of and payment for the
Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Company nor the Selling Shareholders
shall then be under any liability to any Underwriter with respect to the Firm
Shares or Optional Shares with respect to which such Pricing Agreement shall
have been terminated except as provided in Sections 6 and 8 hereof; but, if for
any other reason, Designated Shares are not delivered by or on behalf of the
Company and the Selling Shareholders as provided herein, the Company and each of
the Selling Shareholders [pro rata (based on the number of Shares to be sold by
the Company and such Selling Shareholder hereunder)] [,with the number of Shares
to be sold by . and . to be included, for purposes of this Section, in the
number of Shares to be sold by the Company,] will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company and the Selling
20
<PAGE>
Shareholders shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement; and in all dealings with
any Selling Shareholder hereunder, you and the Company shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of such
Selling Shareholder made or given by any or all of the Attorneys-in-Fact for
such Selling Shareholders.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Shareholders by the Representatives upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and the Selling
Shareholders and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company and each person who controls the Company,
any Selling Shareholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Shares from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us [number] counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and each of the Selling Shareholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company and the Selling Shareholders for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
21
<PAGE>
Any person executing and delivering this Agreement as Attorney-in-Fact for a
Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
[Names of Selling Shareholders]
By:
----------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf of
certain Selling Shareholders named in
Schedule II to the Pricing Agreement.
Accepted as of the date hereof:
[Name(s) of Representatives]
By:
----------------------------
Name:
Title:
On behalf of each of the Underwriters
22
<PAGE>
ANNEX I
PRICING AGREEMENT
-----------------
[Name(s) of Co-Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
.........., 19..
Ladies and Gentlemen:
Micron Electronics, Inc., a Minnesota corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated .......... , 19.. (the "Underwriting Agreement"), to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares" consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Shares pursuant to Section 12 of the Underwriting Agreement
and the address of the Representatives referred to in such Section 12 are set
forth in Schedule III hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, (a) the Company and the Selling
Shareholders, if any, agree to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company and the Selling Shareholders, if any, at the time and place and at the
purchase price to the Underwriters set forth in Schedule III hereto, the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto and, (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares, as provided below, the
Company and the Selling Shareholders, if any, agree to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and the
<PAGE>
Selling Shareholders, if any, at the purchase price to the Underwriters set
forth in Schedule III hereto that portion of the number of Optional Shares as to
which such election shall have been exercised.
The Company and the Selling Shareholders, if any, hereby grant to each of the
Underwriters the right to purchase at their election up to the number of
Optional Shares set forth opposite the name of such Underwriter in Schedule I
hereto on the terms referred to in the paragraph above for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from the
Representatives to the Company and the Attorneys-in-Fact, if any, given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company and the Selling Shareholders, if any,
otherwise agree in writing, no earlier than two or later than ten business days
after the date of such notice.
2
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company, one for each Selling Shareholder and one for
each of the Representatives plus one for each counsel] counterparts hereof, and
upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Company and the Selling Shareholders,
if any. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
[Names of Selling Shareholders]
By:
----------------------------
Name:
Title:
As Attorneys-in-Fact acting on behalf of
certain Selling Shareholders named in
Schedule II to this Agreement
Accepted as of the date hereof:
[Name(s) of Representatives]
By:
----------------------------
Name :
Title:
On behalf of each of the Underwriters
3
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
MAXIMUM NUMBER
OF OPTIONAL
NUMBER OF SHARES WHICH
FIRM SHARES MAY BE
UNDERWRITER TO BE PURCHASED PURCHASED
- ----------- --------------- --------------
<S> <C> <C>
[NAMES OF UNDERWRITERS]
------------ ------------
Total....................
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- ------------------
<S> <C> <C>
The Company................................
The Selling Shareholder(s):
[NAME OF SELLING SHAREHOLDER](a)
[NAME OF SELLING SHAREHOLDER](b)
[NAME OF SELLING SHAREHOLDER](c)
[NAME OF SELLING SHAREHOLDER](d)
Total......................................
</TABLE>
(a) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(b) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(c) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
(d) This Selling Shareholder is represented by [NAME AND ADDRESS OF COUNSEL]
and has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and
each of them, as the Attorneys-in-Fact for such Selling Shareholder.
<PAGE>
SCHEDULE III
TITLE OF DESIGNATED SHARES:
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$........ per Share] [Formula]
PURCHASE PRICE BY UNDERWRITERS:
[$........ per Share] [Formula]
COMMISSION PAYABLE TO UNDERWRITERS:
$........ per Share in Federal (same day) funds
Form of Designated Shares:
Definitive form, to be made available for checking at least twenty-four hours
prior to the Time of Delivery at the office of The Depository Trust Company or
its designated custodian
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds
[DESCRIBE ANY BLACKOUT PROVISIONS WITH RESPECT TO THE DESIGNATED SHARES]
TIME OF DELIVERY:
......... a.m. (New York City time), .................., 19..
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]*:
- --------------------
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Shares should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Shares to be purchased and
sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
<PAGE>
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of items 301, 302, 402 and 503(d),
respectively, of Regulation
S-K;
<PAGE>
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or
included in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the
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Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
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EXHIBIT 1.2
MICRON ELECTRONICS, INC.
DEBT SECURITIES
UNDERWRITING AGREEMENT
----------------------
, 19..
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time Micron Electronics, Inc., a Minnesota corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the
Securities or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
<PAGE>
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company and Micron Technologies, Inc. (the "Parent") represent and
warrant to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-....) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus contained therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form;
no other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, (and other than prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act, each in the form
heretofore delivered to the Representatives); and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule 424(a)
under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus"; any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as
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<PAGE>
amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not 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; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Securities;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in
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<PAGE>
the Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued
and delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Indenture, which will
be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture will constitute
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Designated Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or supplemented
with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or the Indenture, except such as have
been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
4
<PAGE>
(i) The statements set forth in the Prospects under the captions
"Description of Securities" and "Description of [Notes] [Debentures]",
insofar as they purport to constitute a summary of the terms of the
Securities, under the caption ["Taxation"], and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(j) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound;
(k) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(n) Coopers & Lybrand, L.L.P., who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(o) The Company and its subsidiaries own or possess or can acquire on
commercially reasonable terms adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights, mask work
rights, technology and know-how necessary to conduct the business now or
proposed to be conducted by the Company and its subsidiaries as described
in the Prospectus, and except as disclosed in the Prospectus the Company
has not received any notice of infringement of or conflict with (and knows
of no such infringement of or conflict with) asserted rights of others with
respect to any patents, trademarks, service marks, trade names, copyrights,
mask work rights or know-how which could result in any material adverse
effect upon the Company and its subsidiaries; and, except as disclosed in
the Prospectus, the discoveries, inventions, products or processes of the
Company and its subsidiaries referred to in the Prospectus do not, to the
Company's knowledge, infringe or conflict with any right or patent of any
third party or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company; and
(p) The Company and its subsidiaries have obtained any permits, consents
and authorizations required to be obtained by them under laws or
regulations relating to the
5
<PAGE>
protection of the environment or concerning the handling, storage, disposal
or discharge of toxic materials (collectively "Environmental Laws"), and
any such permits, consents and authorizations remain in full force and
effect. The Company and its subsidiaries are in compliance with the
Environmental Laws in all material respects, and there is no pending or, to
the Company's knowledge, threatened, action or proceeding against the
Company and its subsidiaries alleging violations of the Environmental laws.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "Time of Delivery" for such Securities.
5. The Company and Parent agree with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities promptly
after reasonable notice thereof; to advise the Representatives promptly of
any such amendment or supplement after such Time of Delivery and furnish
the Representatives with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
6
<PAGE>
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification,
to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Securities for offering and sale
under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of the Pricing Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus in New York City as
amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the later of
(i) the termination of trading restrictions for such Designated Securities,
as notified to the Company by the Representatives and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without the prior
written consent of the Representatives; and
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(f) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of the
Pricing Agreement, and the Company shall at the time of filing either pay
to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment Surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company and Parent in
or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company and Parent shall
have performed all of their obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of the Pricing Agreement;
no stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests
for additional information on the part of
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<PAGE>
the Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion is
attached as Annex III(a) hereto), dated the Time of Delivery for such
Designated Securities, with respect to the matters covered in paragraphs
(i), (ii), (iv), (v), (vi), (x), (xi), (xii) and (xiii) of subsection (c)
below as well as such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Counsel for the Company satisfactory to the Representatives shall
have furnished to the Representatives their written opinions (a draft of
each such opinion is attached as Annex III(b) hereto), dated the Time of
Delivery for such Designated Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a material adverse effect on
the current or future consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered by
the Company;
(v) The Designated Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
Indenture; and the Designated Securities and the Indenture conform to the
descriptions thereof in the Prospectus as amended or supplemented;
(vi) The Indenture has been duly authorized, executed and delivered by
the parties thereto and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Indenture has been duly qualified under the
Trust Indenture Act;
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<PAGE>
(vii) The issue and sale of the Designated Securities and the compliance
by the Company with all of the provisions of the Designated Securities, the
Indenture, this Agreement and the Pricing Agreement with respect to the
Designated Securities and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company is a
party or by which the Company is bound or to which any of the property or
assets of the Company is subject, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Designated Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture, except such as have
been obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters;
(ix) Neither the Company nor any of its subsidiaries is in violation of
its By-laws or Certificate of Incorporation or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a party or by
which it or any of its properties may be bound;
(x) The statements set forth in the Prospectus under the captions
"Description of Securities", and "Description of [Notes] [Debentures]"
insofar as they purport to constitute a summary of the terms of the
Securities, under the caption ["Taxation"], and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xi) The Company is not an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment
Company Act;
(xii) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder; and they have no reason to believe that any
of such documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
10
<PAGE>
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed,
not misleading; and
(xiii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery for the Designated Securities (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act and
the rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (x) of this Section 7(c), they
have no reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the financial statements
and related schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery (other
than the financial statements and related schedules therein, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or supplemented which
are not filed or incorporated by reference or described as required;
(d) ., patent counsel for the Company and Parent, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex
III(c) hereto) dated each Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) Such counsel does not know of any pending or threatened legal or
governmental proceeding relating to patents of the Company or others, to
which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries are subject which,
if determined adversely to the Company or any of its subsidiaries, would be
reasonably likely to have a material adverse effect on the business,
financial condition or results of operations of the Company and its
subsidiaries;
(ii) Such counsel has no knowledge of any infringement or any alleged
infringement by the Company or any of its subsidiaries of patent rights of
others which
11
<PAGE>
would be reasonably likely to have a material adverse effect on the
business, financial condition or results of operations of the Company and
its subsidiaries; and
(iii) The statements set forth in the Prospectus under the caption
["Risk Factors --Intellectual Property Matters" and "Business --Patents and
Licenses,"] insofar as they purport to constitute a summary of the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
(e) On the date of the Pricing Agreement for such Designated Securities
at a time prior to the execution of the Pricing Agreement with respect to
such Designated Securities and at the Time of Delivery for such Designated
Securities, the independent accountants of the Company who have certified
the financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by reference in
the Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively, to
the effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives (the executed copy of the letter
delivered prior to the execution of the Pricing Agreement is attached as
Annex II(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex II(b)
hereto);
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to
the date of the Pricing Agreement relating to the Designated Securities any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus as amended prior to the
date of the Pricing Agreement relating to the Designated Securities, the
effect of which, in any such case described in Clause (i) or (ii), is in
the judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to
the Designated Securities;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2)
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<PAGE>
under the Act, and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange or on the Nasdaq National Market ("Nasdaq");
(ii) a suspension or material limitation in trading in the Company's
securities on the Nasdaq; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York or California State
authorities; or (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this Clause
(iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as
the Representatives may reasonably request;
(j) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement; and
(k) The Company shall not have received any notice of infringement of or
conflict with asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights, mask work rights,
technology or know-how which individually or in the aggregate, could have a
material adverse effect on the Company.
8. (a) The Company and Parent will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
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<PAGE>
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and
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<PAGE>
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters of the Designated Securities on the other
from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Designated Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to
such Securities and not joint.
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<PAGE>
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that
they have so arranged for the purchase of such Designated Securities, or the
Company notifies the Representatives that it has so arranged for the purchase of
such Designated Securities, the Representatives or the Company shall have the
right to postpone the Time of Delivery for such Designated Securities for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount
of the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Designated Securities which such Underwriter agreed to purchase under the
Pricing Agreement relating to such Designated Securities and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share
(based on the principal amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above
16
<PAGE>
to require non-defaulting Underwriters to purchase Designated Securities of
a defaulting Underwriter or Underwriters, then the Pricing Agreement
relating to such Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements
in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof; but, if for any other reason
Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
17
<PAGE>
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and for each of the Representatives plus one
for each counsel] counterparts hereof.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
----------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
----------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By:
---------------------------
Name:
Title:
18
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ANNEX I
PRICING AGREEMENT
-----------------
[Names of Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto,
, 19..
Ladies and Gentlemen:
Micron Electronics, Inc., a Minnesota corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated . . . . . . . . . . . ., 19 . . (the "Underwriting Agreement"),
between the Company on the one hand and (names of Representatives named therein)
on the other hand, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the
principal amount of Designated Securities set forth opposite the name of such
Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and each of the Representatives plus one for
each counsel] counterparts
<PAGE>
hereof, and upon acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
MICRON ELECTRONICS, INC.
By:
---------------------------
Name:
Title:
MICRON TECHNOLOGY, INC.
By:
---------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By:
-------------------------------
Name:
Title:
On behalf of each of the Underwriters
2
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
<S> <C>
[Names of Underwriters] $
Total $
</TABLE>
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due ,
AGGREGATE PRINCIPAL AMOUNT:
[$]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization[, if any,] from to ]
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities deposited
with The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four hours
prior to the Time of Delivery at the office of DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds [by wire transfer]
TIME OF DELIVERY:
a.m. (New York City time), , 19
INDENTURE:
Indenture dated , 19 , between the Company and
, as Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates, commencing ....................., 19..]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in percentages
of principal amount). If [redeemed on or before , %, and if] redeemed during
the 12-month period beginning ,
<PAGE>
REDEMPTION
YEAR PRICE
---- -----
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$ ] principal amount of Designated Securities on in
each of the years through
at 100% of their principal amount plus accrued interest[, together with
[cumulative] [noncumulative] redemptions at the option of the Company to
retire an additional [$ ] principal amount of Designated Securities
in the years through at 100% of their principal amount
plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
EXTENDABLE PROVISIONS:
Designated Securities are repayable on , [insert date and years], at the
option of the holder, at their principal amount with accrued interest. The
initial annual interest rate will be %, and thereafter the annual
interest rate will be adjusted on , and to a rate not less than
% of the effective annual interest rate on U.S. Treasury obligations with
-year maturities as of the [insert date 15 days prior to maturity date] prior
to such [insert maturity date].]
[If Designated Securities are floating rate debt securities, insert--
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through [and thereafter
will be adjusted [monthly] [on each , , and ] [to an annual
rate of % above the average rate for -year [month][securities]
[certificates of deposit] issued by and [insert
names of banks].] [and the annual interest rate [thereafter] [from
through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills
plus % of Interest Differential (the excess, if any, of (i) the then
current weekly average per annum secondary market yield for -month
certificates of deposit over (ii) the then current interest yield equivalent
of the weekly average per annum market discount rate for -month
Treasury bills); [from and thereafter the rate will be the then current
interest yield equivalent plus % of Interest Differential].]
DEFEASANCE PROVISIONS:
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
<PAGE>
ADDITIONAL CLOSING CONDITIONS:
Paragraph 7(h) of the Underwriting Agreement should be modified in the event
that the Securities are denominated in, indexed to, or principal or interest
are paid in, a currency other than the U.S. dollar, more than one currency or
in a composite currency. The country or countries issuing such currency
should be added to the banking moratorium and hostilities clauses and the
following additional clause should be added to the paragraph (the entire
paragraph should be restated, as amended):
"; ( ) the imposition of the proposal of exchange controls by any
governmental authority in [insert the country or countries issuing such
currency, currencies or composite currency]".
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS] * :
- ---------------------------
* A description of particular tax, accounting or other unusual features
(such as the addition of event risk provisions) of the Designated Securities
should be set forth, or referenced to an attached and accompanying description,
if necessary, to ensure agreement as to the terms of the Designated Securities
to be purchased and sold. Such a description might appropriately be in the form
in which such features will be described in the Prospectus Supplement for the
offering.
<PAGE>
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representative or representatives of the
Underwriters (the "Representatives") such term to include an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited
<PAGE>
procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation
S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference
in the Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or
included in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included
or incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights,
<PAGE>
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the date
of the latest balance sheet included or incorporated by reference in
the Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
<PAGE>
EXHIBIT 4.1
================================================================================
MICRON ELECTRONICS, INC.
TO
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
TRUSTEE
----------------
INDENTURE
DATED AS OF ____________, 1996
----------------
DEBT SECURITIES
================================================================================
<PAGE>
MICRON ELECTRONICS, INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE,
OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
Trust Indenture Act Indenture
Section Section
- ------------------- --------------
<S> <C> <C>
(S) 310(a)(1) ............................................ 609
(a)(2) ............................................ 609
(a)(3) ............................................ Not Applicable
(a)(4) ............................................ Not Applicable
(b) ............................................ 608
610
(S) 311(a) ............................................ 613
(b) ............................................ 613
(S) 312(a) ............................................ 701
702(a)
(b) ............................................ 702(b)
(c) ............................................ 702(c)
(S) 313(a) ............................................ 703(a)
(b) ............................................ 703(a)
(c) ............................................ 703(a)
(d) ............................................ 703(b)
(S) 314(a) ............................................ 704
(a)(4) ............................................ 101
1004
(b) ............................................ Not Applicable
(c)(1) ............................................ 102
(c)(2) ............................................ 102
(c)(3) ............................................ Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 102
(S) 315(a) ............................................ 601
(b) ............................................ 602
(c) ............................................ 601
(d) ............................................ 601
(e) ............................................ 514
(S) 316(a) ............................................ 101
(a)(1)(A) ............................................ 502
512
(a)(1)(B) ............................................ 513
(a)(2) ............................................ Not Applicable
(b) ............................................ 508
(c) ............................................ 104(c)
(S) 317(a)(1) ............................................ 503
(a)(2) ............................................ 504
(b) ............................................ 1003
(S) 318(a) ............................................ 107
</TABLE>
________________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-2-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
PAGE
----
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION..................................................... 1
SECTION 101. Definitions.......................................... 1
SECTION 102. Compliance Certificates and Opinions................. 7
SECTION 103. Form of Documents Delivered to Trustee............... 8
SECTION 104. Acts of Holders, Record Dates........................ 8
SECTION 105. Notices, Etc., to Trustee and Company................ 10
SECTION 106. Notice to Holders; Waiver............................ 10
SECTION 107. Conflict with Trust Indenture Act.................... 10
SECTION 108. Effect of Headings and Table of Contents............. 11
SECTION 109. Successors and Assigns............................... 11
SECTION 110. Separability Clause.................................. 11
SECTION 111. Benefits of Indenture................................ 11
SECTION 112. Governing Law........................................ 11
SECTION 113. Legal Holidays....................................... 11
ARTICLE TWO - SECURITY FORMS.......................................... 12
SECTION 201. Forms Generally...................................... 12
SECTION 202. Form of Face of Security............................. 12
SECTION 203. Form of Reverse of Security.......................... 14
SECTION 204. Form of Legend for Global Securities................. 18
SECTION 205. Form of Trustee's Certificate of Authentication...... 18
ARTICLE THREE - THE SECURITIES........................................ 20
SECTION 301. Amount Unlimited, Issuable in Series................. 20
SECTION 302. Denominations........................................ 22
SECTION 303. Execution, Authentication, Delivery and Dating....... 22
SECTION 304. Temporary Securities................................. 24
SECTION 305. Registration, Registration of Transfer and Exchange.. 24
SECTION 306. Mutilated, Destroyed, and Lost and Stolen Securities. 26
SECTION 307. Payment of Interest, Interest Rights Preserved....... 26
SECTION 308. Persons Deemed Owners................................ 28
SECTION 309. Cancellation......................................... 28
SECTION 310. Computation of Interest.............................. 29
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PAGE
----
ARTICLE FOUR - SATISFACTION AND DISCHARGE............................. 29
SECTION 401. Satisfaction and Discharge of Indenture.............. 29
SECTION 402. Application of Trust Money........................... 30
ARTICLE FIVE - REMEDIES............................................... 31
SECTION 501. Events of Default.................................... 31
SECTION 502. Acceleration of Maturity; Rescission and Annulment... 32
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................ 33
SECTION 504. Trustee May File Proofs of Claim..................... 34
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities........................................ 34
SECTION 506. Application of Money Collected....................... 35
SECTION 507. Limitation on Suits.................................. 35
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest................................. 36
SECTION 509. Restoration of Rights and Remedies................... 36
SECTION 510. Rights and Remedies Cumulative....................... 36
SECTION 511. Delay or Omission Not Waiver......................... 36
SECTION 512. Control by Holders................................... 36
SECTION 513. Waiver of Past Defaults.............................. 37
SECTION 514. Undertaking for Costs................................ 37
SECTION 515. Waiver of Stay or Extension Laws..................... 37
ARTICLE SIX - THE TRUSTEE............................................. 38
SECTION 601. Certain Duties and Responsibilities.................. 38
SECTION 602. Notice of Defaults................................... 38
SECTION 603. Certain Rights of Trustee............................ 38
SECTION 604. Not Responsible for Recitals or Issuance of
Securities........................................ 39
SECTION 605. May Hold Securities.................................. 39
SECTION 606. Money Held in Trust.................................. 40
SECTION 607. Compensation and Reimbursement....................... 40
SECTION 608. Disqualification; Conflicting Interests.............. 40
SECTION 609. Corporate Trustee Required; Eligibility.............. 41
SECTION 610. Resignation and Removal; Appointment of Successor.... 41
SECTION 611. Acceptance of Appointment by Successor............... 42
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PAGE
----
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.......................................... 43
SECTION 613. Preferential Collection of Claim Against Company..... 44
SECTION 614. Appointment of Authenticating Agent.................. 44
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..... 46
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders........................................ 46
SECTION 702. Preservation of Information; Communications
to Holders........................................ 46
SECTION 703. Reports by Trustee................................... 46
SECTION 704. Reports by Company................................... 47
ARTICLE EIGHT - CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.. 47
SECTION 801. Company May Consolidate, Etc., Only on
Certain Terms..................................... 47
SECTION 802. Successor Substituted................................ 48
ARTICLE NINE - SUPPLEMENTAL INDENTURES................................ 48
SECTION 901. Supplemental Indentures Without Consent of Holders... 48
SECTION 902. Supplemental Indentures with Consent of Holders...... 49
SECTION 903. Execution of Supplemental Indenture.................. 50
SECTION 904. Effect of Supplemental Indentures.................... 50
SECTION 905. Conformity with Trust Indenture Act.................. 50
SECTION 906. Reference in Securities to Supplemental Indentures... 51
ARTICLE TEN - COVENANTS............................................... 51
SECTION 1001. Payment of Principal, Premium and Interest.......... 51
SECTION 1002. Maintenance of Office or Agency..................... 51
SECTION 1003. Money for Securities Payments to Be Held in Trust... 52
SECTION 1004. Statement by Officers as to Default................. 52
SECTION 1005. Existence........................................... 53
ARTICLE ELEVEN - REDEMPTION OF SECURITIES............................. 53
SECTION 1101. Applicability of Article............................ 53
SECTION 1102. Election to Redeem; Notice to Trustee............... 53
SECTION 1103. Selection by Trustee of Securities to Be Redeemed... 53
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
PAGE
----
SECTION 1104. Notice of Redemption................................ 54
SECTION 1105. Deposit of Redemption Price......................... 55
SECTION 1106. Securities Payable on Redemption Date............... 55
SECTION 1107. Securities Redeemed in Part......................... 55
ARTICLE TWELVE - SINKING FUNDS........................................ 56
SECTION 1201. Applicability of Article............................ 56
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities 56
SECTION 1203. Redemption of Securities for Sinking Fund........... 56
ARTICLE THIRTEEN - DEFEASANCE......................................... 57
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance....................................... 57
SECTION 1302. Defeasance and Discharge............................ 57
SECTION 1303. Covenant Defeasance................................. 58
SECTION 1304. Conditions to Defeasance or Covenant Defeasance..... 58
SECTION 1305. Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous
Provisions....................................... 59
SECTION 1306. Reinstatement....................................... 60
ARTICLE FOURTEEN - REPAYMENT AT OPTION OF SECURITY HOLDERS............ 61
SECTION 1401. Applicability of Article............................ 61
SECTION 1402. Repayment of Securities............................. 61
SECTION 1403. Exercise of Option; Notice.......................... 61
SECTION 1404. Securities Payable on the Repayment Date.............. 62
</TABLE>
-6-
<PAGE>
INDENTURE, dated as of __________, 1996, between Micron Electronics, Inc.,
a corporation duly organized and existing under the laws of the State of
Minnesota (herein called the "Company"), having its principal office at 900 East
Karcher Road, Nampa, Idaho 83687, and Norwest Bank Minnesota, National
Association., a national banking association duly organized and existing under
the laws of the United States of America, as Trustee hereunder (herein called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and
-7-
<PAGE>
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act for it in respect thereof.
"Board Resolution" means a copy of one or more resolutions certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Order" or "Company Request" means a written request or order
signed in the name of the Company by (a) its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by (b) its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be conducted, which
office, at the date of execution of this Indenture,
-8-
<PAGE>
is located at Norwest Center, Sixth Street and Marquette, Minneapolis, Minnesota
55479-0069 (Attention: Corporate Trust Office).
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Defeasible Series" has the meaning specified in Section 1301.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder, as in effect from time to
time.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of the particular series of Securities
established as contemplated by Section 301; provided however, that if at any
time more than one person is acting as Trustee under this Indenture due to the
appointment of one or more separate Trustees for any one or more separate series
of Securities, "Indenture" shall mean, with respect to such series of Securities
for which any such Person is Trustee, this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities for which such
person is Trustee established as contemplated by Section 301, exclusive,
however, of any provisions or terms which relate solely to other series of
Securities for which such Person is not Trustee, regardless of when such terms
or provisions were adopted, and exclusive of any provisions or terms adopted by
means of one or more indentures supplemental hereto executed and delivered after
such person had become such Trustee, but to which
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such person, as such Trustee, was not a party; provided further that in
the event that this indenture is supplemented or amended by one or more
indentures supplemental hereto which are only applicable to certain series of
Securities, the term "Indenture" for a particular series of Securities shall
only include the supplemental indentures applicable thereto.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, exercise of option for
repayment or otherwise.
"Notice of Default" means a written notice of the kind specified in Section
501(4).
"Officers' Certificate" means a certificate signed by (a) the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
(b) by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), or other counsel
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Article Thirteen; and
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(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, (a) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof pursuant to
Section 502, (b) the principal amount of a Security denominated in one or more
foreign currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 301 on the date of
original issuance of such Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in (a)
above) of such Security, and (c) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver or upon any
such determination as to the presence of a quorum, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
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"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Repayment Date", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holders, means the date fixed for such
repayment by or pursuant to this Indenture.
"Repayment Price", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holder, means the price at which it is
to be repaid pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president or assistant vice
president or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
905; provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939, as so amended.
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"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" means (a) any security that is (i) a direct
obligation of the United States of America for the payment of which full faith
and credit of the United States of America is pledged or (ii) an obligation 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 (i) or (ii), is not callable or redeemable at the option of the
issuer thereof and (b) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any U.S. Government Obligation specified in clause (a), which U.S.
Government Obligation is held by such custodian for the account of the holder of
such depositary receipt, or with respect to any specific payment of principal of
or interest on any such U.S. Government Obligation, 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 depositary receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than those provided for in
Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
related thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
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(4) a statement as to whether, in the opinion of each such individual
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders, Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are received by the Trustee and,
where it is hereby expressly required, by the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
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sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701 ) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holder of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder only by Holders of a requisite
principal amount of the Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder shall be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents). On or prior to any expiration
date set pursuant to this paragraph, the Company may, on one or more occasions
at its option, extend such date to any later date. Nothing in this paragraph
shall prevent any Holder (or any duly appointed agent thereof) from giving or
taking, after any expiration date, any action identical to, or, at any time,
contrary to or different from, any action given or taken, or purported to have
been given or taken, hereunder by a Holder on or prior to such date, in which
event the Company may set a record date in respect thereof pursuant to this
paragraph.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
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SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration; provided, however, that such notice shall not be
deemed to be given until received by the Trustee, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company; provided, however, that
such notice shall not be deemed to be given until received by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the can may be.
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SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date or Stated Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture or the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date, Redemption Date, Repayment Date or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date or Stated Maturity,
as the case may be.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers execution such Securities, as evidenced by their
execution of such Securities.
SECTION 202. Form of Face of Security.
[INSERT ANY LEGEND REQUIRED BY THE DEPOSITORY.]
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
MICRON ELECTRONICS, INC.
___________________________________________________
No. _______________ $_______________
MICRON ELECTRONICS, INC., a corporation duly organized and existing under
the laws of Minnesota (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of ____________________ Dollars on _______________ [IF THE
SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT ----, and to pay interest
thereon from __________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on ____________ and
_____________ in each year, commencing ______________ at the rate of _____% per
annum, until the principal hereof is paid or made available for payment [IF
APPLICABLE, INSERT --, and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of _____% per
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annum on any overdue principal and premium and on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _______________ or _______________
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided is said Indenture.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption, upon
repayment or at Stated Maturity and in such case the overdue principal of this
Security shall bear interest at the rate of _____% per annum (to the extent that
the payment of such interest shall be legally enforceable), which shall accrue
from the date of such default in payment to the date payment of such principal
has been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of _____% per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of principal of (and premium, if any) and [IF APPLICABLE,
INSERT -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ______________, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. In the event the Global
Security representing the Securities becomes exchangeable for definitive
Securities pursuant to the terms of the Indenture, at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
[IF APPLICABLE, INSERT -- So long as all of the Securities of this series
are represented by Global Securities, the principal of, premium, if any, and
interest, if any, on this Global Security shall be paid in same day funds to the
Depositary, or to such name or entity as is requested by an authorized
representative of the Depositary. If at any time the Securities of this series
are no longer represented by the Global Securities and are issued in definitive
form ("Certificated Securities"), then the principal of, premium, if any, and
interest, if any, on each Certificated Security at Maturity shall be paid in
same day funds to the Holder upon surrender of such Certificated Security at the
Corporate Trust Office of the Trustee, or at such other place or places as may
be designated in or pursuant to the Indenture, provided that such Certificated
Security is surrendered to the Trustee, acting as Paying Agent, in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest with respect to Certificated Securities other
than at Maturity may, at the option of the
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Company, be made by check mailed to the address of the Person entitled thereto
as it appears on the Security Register on the relevant Regular or Special Record
Date or by wire transfer in same day funds to such account as may have been
appropriately designated to the Paying Agent by such Person in writing not later
than such relevant Regular or Special Record Date.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereof has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
MICRON ELECTRONICS, INC.
By ___________________________________
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _______, 1996 (herein called the
"Indenture"), between the Company and Norwest Bank Minnesota, National
Association, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof [IF APPLICABLE, INSERT --,
limited in aggregate amount to $__________].
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE,
INSERT -- (1) on _______________ in any year commencing with the year _____ and
ending with the year _____ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [on or after __________, 19___], as a whole or in part, at the election of
the Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ______________, _____%, and if
redeemed] during the 12 month period beginning _______________ of the years
indicated,
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REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than __ days' notice by mail, (1) on _______________ in
any year commencing with the year __________ and ending with the year _____
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after ____________________], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning _______________ of the years indicated,
YEAR REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE
THROUGH OPERATION THAN THROUGH OPERATION
OF THE SINKING FUND OF THE SINKING FUND
- ---- ------------------- ----------------------
and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
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[Notwithstanding the foregoing, the Company may not, prior to ____________,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than _____% per annum.]
[The sinking fund for this series provides for the redemption on __________
in each year beginning with the year _____ and ending with the year _____ of
[not less than $__________ ("mandatory sinking fund") and not more than]
$__________ aggregate principal amount of Securities of this series. Securities
of this series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [in the inverse order in
which they become due].]
[IF THE SECURITY IS TO BE SUBJECT TO REPAYMENT AT THE OPTION OF THE HOLDER,
INSERT -- To be repaid at the option of the Holder, the Company must receive
this Security, with the form of "Option to Elect Repayment" hereon duly
completed, at an office or agency of the Company maintained for that purpose in
__________ (or at such other place of which the Company shall from time to time
notify the Holder of this Security) not less than _____ nor more than _____ days
prior to the Repayment Date. The exercise of the repayment option by the Holder
shall be irrevocable.]
[IF THE SECURITY IS SUBJECT TO REDEMPTION, INSERT -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of Securities of such series, to waive compliance by the
Company with certain provisions of the
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Indenture and certain defaults under the Indenture and heir consequence. Any
such consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
[IF APPLICABLE, INSERT -- Each of the defeasance and covenant defeasance
provisions of Article Thirteen of the Indenture shall apply to this Security.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $_____ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other Governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall for all purposes be governed by and construed in
accordance with the laws of the State of New York.
The terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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[FORM OF OPTION TO ELECT REPAYMENT.]
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Security (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Repayment Date to the undersigned at
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Typewrite Name and Address of the Undersigned)
For this Security to be repaid, the Company must receive this Security,
with this "Option to Elect Repayment" form duly completed, at an office or
agency of the Company maintained for that purpose in ____________, or at such
other place of which the Company shall from time to time notify the Holder, no
less than ___ days nor more than ____ days prior to [_________, ... or ________]
[the________ or ___________ (commencing on __________)].
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be $___________________, or an
integral multiple of $____________) which the Holder elects to have repaid:
$_________________.
Dated: _________________________________________________
Note: The signature must correspond with the name
as written upon the face of the Security in every
particular without alteration or enlargement
SECTION 204. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder may bear any
legend required to comply with the requirements of any Depositary.
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
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<PAGE>
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
AS TRUSTEE
By _________________________________________
Authorized Officer
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited, Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
There shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in a manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1404 and except for
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates are
determined, the date or dates from which such interest shall accrue, the
Interest Payment Dates on which any such interest shall be payable on any
Securities and the Regular Record Date for any interest payable on any
Interest Payment Date, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable and where the
Securities of any series may be surrendered for registration of transfer;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, as the case may be, in whole or in part, at the option of the
Company;
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(8) the obligation, if any, of the Company to redeem or repurchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or repurchased, in
whole or in part, pursuant to such obligation, and any provisions for the
remarketing of such Securities;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
"Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, formula or other method, the manner in which such amounts
shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) if applicable, that the Securities of such series shall be
defeasible as provided in Article Thirteen;
(15) if and as applicable, that the Securities of such series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the Depositary or Depositaries for such Global Security
or Global Securities and any circumstances other than those set forth in
Section 305 in which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of, a Person
other than the Depositary for such Global Security or a nominee thereof and
in which such transfer may be registered;
(16) the Person who shall be the Security Registrar, if other than the
Trustee, and the Person who will be the Paying Agent;
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(17) if applicable, any Events of Default with respect to Securities
of such series, to the extent that such Events of Default are in addition
to the Events of Default herein contained;
(18) if applicable, the terms and conditions, if any, pursuant to
which such securities are convertible into or exchangeable for Common Stock
or other securities of the Company; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to 303) set forth, or determined
in the manner provided, in the Officers' Certificate referred to above or in any
such indenture supplemental hereto. All Securities of any one series need not
be issued at the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal reproduced thereon,
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order (which may provide that Securities that are the subject
thereof will
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<PAGE>
be authenticated and delivered by the Trustee from time to time upon the
telephonic or written order of Persons designated in said Company Order and that
such Persons are authorized to determine such terms and conditions of said
Securities as are specified in the Company Order) shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to a Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to a Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
and to such other matters as counsel may specify.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued and contemplate issuance of all Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and
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delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for that series for the purpose of exchanges of Securities of such
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be maintained
by the Company in accordance with Section 1002 a register (the register
maintained in such office and in any other office or agency of the Company in a
Place of Payment being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency maintained pursuant to Section 1002 for such purpose in
a Place of Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor, upon
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surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive .
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1404 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (b) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, any Global Security
shall be exchangeable pursuant to this Section 305 for Securities registered in
the names of Persons other than the Depositary for such Global Security or its
nominee only when (a) such Depositary notifies the Company and the Trustee in
writing that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and a successor Depositary is not appointed
by the Company within 90 days, (b) the Company in its sole discretion determines
that Securities shall no longer be represented by a Global Security and executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable, (c) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to the Securities represented
by such Global Security or (d) there shall exist such other circumstances, if
any, as shall be specified for this purpose as contemplated by Section 301. Any
Global Security that is exchangeable pursuant to clause (a), (b), (c) or (d)
above, shall be surrendered by the Depositary, or such other depositary as shall
be specified in the Company Order with respect thereto, to the Trustee, as the
agent for such purpose, to be exchanged, in whole or in part, for definitive
Securities without charge, and the Trustee shall authenticate and deliver, in
exchange for each portion of such permanent Global Security, an equal aggregate
principal amount of definitive Securities, executed by the Company, of the same
series of authorized denominations and of like tenor as the portion of such
Global Security to be exchanged, which shall be in the form of registered
Securities as provided in the Company Order.
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Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security other than pursuant to
clauses (a), (b), (c) or (d) in the preceding paragraph, whether pursuant to
this Section, Sections 304, 306, 906, 1107 or 1404 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security.
SECTION 306. Mutilated, Destroyed, and Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence to
their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest, Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
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In the case of Securities represented by a Global Security registered in
the name of or held by a Depositary or its nominee, unless otherwise specified
by Section 301, payment of principal, premium, if any, and interest, if any,
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or Holder of such Global Security. None of the Company, the
Trustee, any Paying Agent, any Authenticating Agent nor the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice is given by the Company to the Trustee, of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable
by the Trustee.
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At the option of the Company, interest on Securities of any series that
bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register, except
as otherwise provided pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and (except
as otherwise specified as contemplated by Section 301(3) and subject to Section
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
In the case of a Global Security, so long as the Depositary for such Global
Security, or its nominee, is the registered owner of such Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or Holder of the Securities represented by such Global Security for all
purposes under this Indenture. Except as provided in Section 305, owners of
beneficial interests in a Global Security will not be entitled to have
Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall (a) prevent the Company, the Trustee, or any agent of the Company
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or (b) impair, as between a Depositary
and holders of beneficial interests in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary as
Holder of such Global Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, repayment, registration
of transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
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practices and the Trustee shall from time to time, or upon request by the
Company, deliver to the Company certificates of destruction with respect
thereto.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose, lawful money of the United States or U.S. Government
Obligations which through the payment of interest and
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principal in respect thereof in accordance with their terms will
provide lawful money not later than the due dates of principal (and
premium, if any) or interest, or any combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to the
Securities of all series to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money and
U.S. Government Obligations deposited with the Trustee pursuant to Section 401
shall be held in trust and applied by it (without liability, in the case of
monies, for the payment of interest thereon or the investment thereof, except as
otherwise agreed to by the Company and the Trustee for the exclusive benefit of
the Company), in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
except to the extent such event is specifically deleted or modified as
contemplated by Section 301 for the Securities of that series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is specifically
dealt with elsewhere in this Section or which has expressly been included
in this Indenture solely for the benefit of a series of Securities other
than that series or which has been included in this Indenture but not made
applicable to the Securities of such series), and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder, or
(5) the entry by a court having jurisdiction in the premises of (a) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (b) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its properties, or ordering the winding up or liquidation of its
affair, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
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(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization, or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law,
or the consent by the Company to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its properties, or the making by the Company of
an assignment for the benefit of creditors, or the admission by the Company
in writing its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(7) any other Event of Default established as contemplated by Section
301 with respect to Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case (other than an
Event of Default specified in 501(5) or (6)) the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of that series
may declare the principal amount (or, if any of the Securities of that series
are Original Issue Discount Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof) of all of the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(5)
or (6) occurs, the principal of, premium on, if any, and the interest accrued on
all the Securities of that series will become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder of
the Securities of that series.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if;
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities
of that series which have become due otherwise than by such
declaration of acceleration and any
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interest thereon at the rate or rates prescribed therefor in such
Securities, to the extent that payment of such interest is lawful,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series, and any such default continues for any period of
grace provided with respect to the Securities of such series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holder of any such Security (or the Holders of any such series in the case of
clause (3) above), the whole amount then due and payable on any such Security
(or on the Securities of any such series in the cast of clause (3) above) for
principal and any premium and interest, if any, and, to the extent that payment
of such interest shall be legally enforceable, interest on any overdue principal
and premium and on any overdue interest, at the rate or rates prescribed
therefor by the terms of any such Security (or of Securities of any such series
in the case of clause (3) above); and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts owing the Trustee under
Section 607.
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If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceedings to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other
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of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (except as specified as
contemplated by Section 301(3) and subject to Section 307) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
Subject to Section 601 and Section 603, the Holders of a majority in principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of
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conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine (it being understood that the
Trustee shall have no obligation to make such determination) that the
action so directed would be unjustly prejudicial to Holders of Securities
of that series, or any other series, not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities of
such series waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or omitted by
it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby
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expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing (but subject to Section
107), no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall, within ninety (90) days after it has knowledge of the
occurrence of a default, mail to all Holders of Securities of such series, as
the names and addresses of such Holders appear upon the Security Register,
notice to all defaults known to a Responsible Officer, unless such defaults
shall have been cured or waived before the giving of such notice; provided that,
except in the case of default in the Holder of Securities and of such series of
the character specified in Section 501(1), (2) or (3), the Trustee shall be
protected in withholding such notice if and 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 Holders of
Securities of such series; provided further that in the case of any default of
the character specified in Section 501(4) with respect to Securities of such
series, no such notice to Holders of Securities of such series shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
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(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture (including, without
limitation, under Section 512), unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of
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Securities and, subject to Sections 608 and 613, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for investment of or interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence or
bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder or the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith.
As security for the performance of the obligations of the Company under this
Section, the Trustee shall have a lien prior to the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for payment of principal of (and premium, if any) or interest, if any, on
particular Securities.
"Trustee", for purposes of this Section 607, includes any predecessor Trustee,
provided that the negligence or bad faith of any Trustee shall not affect the
rights under this Section 607 of any other Trustee.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning
of the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided
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by, and subject to the provisions of, the Trust Indenture Act and this
Indenture, and the Company shall take prompt action to have a successor Trustee
appointed in the manner provided herein. For purposes of Section 301(b)(1) of
the Trust Indenture Act, no Trustee hereunder will be deemed to have a
conflicting interest solely by reason of being Trustee in respect of more than
one series of Securities.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with respect to the Securities
of each series, which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then, for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(A) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(B) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(C) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer
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shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the
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rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated
but not delivered by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated
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with the same effect as if such successor Trustee had itself authenticated such
Securities. In the event any Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
SECTION 613. Preferential Collection of Claim Against Company.
Reference is made to Section 311 of the Trust Indenture Act. For purposes of
Sections 311(b)(4) and 311 (b)(6) of the Trust Indenture Act, the following
terms shall have the following meanings:
"cash transaction" means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
acceptances and payable upon demand.
"self-liquidating paper" means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents evidencing
title to, possession of or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security is received by the
Trustee simultaneously with the creation of the creditor relationship with the
Company arising from the making, drawing, negotiating or incurring of the draft,
bill of exchange, acceptance or obligation.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to one
or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issue and
upon exchange, registration of transfer or partial redemption or repayment
thereof or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an
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Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition to
the Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
AS TRUSTEE
By ___________________________________________,
As Authenticating Agent
By ___________________________________________,
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semiannually, not later than 15 days after the Regular Record
Date for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities
as of such Regular Record Date (unless the Trustee has such information),
or if there is no Regular Record Date for interest for such series of
Securities, semi-annually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 701 and (ii) received by the Trustee for each series in the capacity as
Security Registrar if the Trustee is acting in such capacity. The Trustee may
destroy any list furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders of Securities, as their names
and addresses appear in the Security Register, such reports, if any, concerning
the Trustee and its actions under this Indenture
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as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. Any such reports required pursuant to Section
313(a) of the Trust Indenture Act shall be transmitted on or about July 15, 1997
and on or about each July 15 thereafter and shall be dated not more than 60 days
before such July 15.
(b) A copy of such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange or automated quotation
system upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange or automated quotation system.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, if any, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
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(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into, any
other Person or any conveyance, transfer or lease of the properties and assets
of the Company substantially as an entirety in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
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(5) to add, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall not apply to any Security of
any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption or repayment thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date,
as the case may be), or
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(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section 513,
except to increase any such percentage, or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby,
provided, however, that this clause shall not be deemed to require the
consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the deletion of this
proviso, in accordance with the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indenture.
In executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
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SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities
that it will duly and punctually pay the principal of and any premium and
interest on the Securities of that series in accordance with the terms of the
Securities and this Indenture.
SECTION Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
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SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (a) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (b) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or interest
on any Security of any series and remaining unclaimed for two years after such
principal, premium or interest has become due and payable shall be paid to the
Company, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, a brief certificate
from the principal executive, financial or accounting officer of the Company as
to his or her knowledge of the Company's compliance (without
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regard to any period of grace or requirement of notice provided hereunder) with
all conditions and covenants hereof.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series of the same tenor, the Company shall,
at least 60 days (except as such shorter period is otherwise specified as
contemplated by Section 301 for Securities of any series) (45 days (except as
such shorter period is otherwise specified as contemplated by Section 301 for
Securities of any series) in the case of redemption of all Securities of any
series or of any series of the same tenor) prior to the Redemption Date fixed by
the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date of the principal amount of Securities
of such series to be redeemed and, if applicable, of the tenor of the Securities
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all
of the Securities of such series and of a specified tenor are to be redeemed),
the particular Securities to be redeemed shall be selected not more than 60 days
(except as such shorter period is otherwise specified as contemplated by Section
301 for Securities of any series) prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series not previously called for
redemption, by such method as the Trustee
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shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized domination for Securities of that series. If less than all of the
Securities of such series (and of a specified tenor) are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
(except as such shorter period is otherwise specified as contemplated by Section
301 for Securities of any series) prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series (and specified tenor) not
previously called for redemption in accordance with the preceding sentence.
Unless otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified in the Securities to be redeemed, to each
Holder of Securities to be redeemed, at his address appearing in the Security
Register.
Any notice that is mailed to the Holder of any Securities in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the cast of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the
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Holder of such Security will receive, without charge, a new Security or
Securities of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
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SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the
retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". The cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (a) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (b) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such Series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering the crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option by Board Resolution at any time, to have
either Section 1302 or Section 1303 applied to the Outstanding Securities of any
series designated pursuant to Section 301 as being defeasible pursuant to this
Article Thirteen (hereinafter called "Defeasible Series"), upon compliance with
the conditions set forth below in this Article Thirteen; provided that Section
1302 will not apply to any series of Securities that is convertible into Common
Stock or convertible into or exchangeable for any other securities pursuant to
Section 301(18).
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301 to have
this Section 1302 applied to the Outstanding Securities of any Defeasible Series
and subject to the proviso to Section 1301, the Company will be deemed to have
been discharged from its obligations with respect to the Outstanding Securities
of such series as provided in this Section 1302 on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company will be
deemed to have paid and discharged the entire indebtedness represented by the
Outstanding Securities of such series and to have satisfied all its other
obligations under the Securities of such series and this Indenture insofar as
the Securities of such series are concerned (and the Trustee or Trustees, at the
expense of the Company, will execute proper instruments acknowledging the same),
subject to the following which will survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Securities of such series to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in Section 1304, payments in respect of the principal of and any
premium and interest on such Securities of such series when payments are due,
(b) the Company's obligations with respect to the Securities of such series
under Sections 304, 305, 306, 906, 1002 and
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1003, (c) the rights, powers, trusts, duties, and immunities of the Trustee
hereunder, and (d) this Article Thirteen. Subject to compliance with this
Article Thirteen, the Company may exercise its option provided in Section 1301
to have this Section 1302 applied to the Outstanding Securities of any
Defeasible Series notwithstanding the prior exercise of its option provided in
Section 1301 to have Section 1303 applied to the Outstanding Securities of such
series.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301 to have
this Section 1303 applied to the Outstanding Securities of any Defeasible
Series, (a) the Company will be released from its obligations under Section 801,
Section 1005, and the provisions of any Supplemental Indenture specified in such
Supplemental Indenture, and (b) the occurrence of any event specified in
Sections 501(3), 501(4) (with respect to any of Section 801, Section 1005, and
the provisions of any Supplemental Indenture specified in such Supplemental
Indenture) and 501(7) will be deemed not to be or result in an Event of Default,
in each case with respect to the Outstanding Securities of such series as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that the Company may omit to comply with
and will have no liability in respect of any term, condition, or limitation set
forth in any such specified Section (to the extent so specified in the case of
Section 501(4)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and the Securities of such series will be unaffected
thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following will be the conditions to application of either Section 1302 or
Section 1303 to the Outstanding Securities of any Defeasible Series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provision of this Article Thirteen applicable to it) as trust funds in
trust for the benefit of the Holders of Outstanding Securities of such
series (i) money in an amount, or (ii) U.S. Government Obligations that
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, without reinvestment, not
later than one day before the due date of any payment, money in an amount,
or (iii) a combination thereof, in each case sufficient to pay and
discharge, and which will be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on the Securities of such series on the respective Stated
Maturities or on any earlier date or dates on which the Securities of such
series shall be subject to redemption and the Company shall have given the
Trustee irrevocable instructions satisfactory to the Trustee to give notice
to the Holders of the redemption of the Securities of such series, all in
accordance with the terms of this Indenture and the Securities of such
series.
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(2) In the case of an election under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel (from a counsel who
shall not be an employee of the Company) to the effect that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon, such opinion shall confirm that, the
Holders of the Outstanding Securities of such series will not recognize
gain or loss for federal income tax purposes as a result of the deposit,
Defeasance, and discharge to be effected with respect to the Securities of
such series and will be subject to federal income tax on the same amount,
in the same manner, and at the same times as would be the case if such
deposit, Defeasance, and discharge were not to occur.
(3) In the case of an election under Section 1303, the Company shall
have delivered to the Trustee an Opinion of Counsel (from a counsel who
shall not be an employee of the Company) to the effect that the Holders of
the Outstanding Securities of such series will not recognize gain or loss
for federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to the Securities of such series and
will be subject to federal income tax on the same amount, in the same
manner, and at the same times as would be the case if such deposit and
Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee and Officers'
Certificate to the effect that the Securities of such series, if then
listed on any securities exchange or automated quotation system, will not
be delisted solely as a result of such deposit.
(5) No Event of Default or event that (after notice or lapse of time
or both) would become an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 501(5) and 501(6), at any
time on or prior to the 90th calendar day after the date of such deposit
(it being understood that this condition will not be deemed satisfied until
after such 90th calendar day).
(6) Such Defeasance or Covenant Defeasance will not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
(9) Such Defeasance or Covenant Defeasance will not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company
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Act of 1940, as amended, unless such trust will be qualified under such Act
or exempt from regulation thereunder.
SECTION 1305. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
(1) Subject to the provisions of Section 1003, all money and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section
1305 and Section 1306, the Trustee and any such other trustee are referred
to collectively as the "Trustee") pursuant to Section 1304 in respect of
the Securities of any Defeasible Series will be held in trust and applied
by the Trustee, in accordance with the provisions of the Securities of such
series and this Indenture, to the payment, either directly or through any
such Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of Securities of such series, of
all sums due and to become due thereon in respect of principal and any
premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
(2) The Company will pay and indemnify the Trustee against any tax,
fee, or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and
interest received in respect thereof other than any such tax, fee, or other
charge that by law is for the account of the Holders of Outstanding
Securities.
(3) Notwithstanding anything in this Article Thirteen to the
contrary, the Trustee will deliver or pay to the Company from time to time
upon a Company Request any money or U.S. Government Obligations held by it
as provided in Section 1304 with respect to Securities of an Defeasible
Series that are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Defeasance or Covenant Defeasance
with respect to the Securities of such series.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance
with this Article Thirteen with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority
enjoining, restraining, or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
will be revived and reinstated as through no deposit had occurred pursuant to
this Article Thirteen with respect to Securities of such series until such time
as the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1305 with respect to Securities of such series in accordance
with this Article Thirteen; provided, however, that if the Company makes any
payment of principal of or any premium or interest on any Security of such
series following the reinstatement of its obligations, the Company will be
subrogated to the rights of the Holders of Securities of such series to receive
such payment from the money so held in trust.
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ARTICLE FOURTEEN
REPAYMENT AT OPTION OF SECURITY HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with their
terms and (except as otherwise contemplated by Section 301 for Securities of
such series) in accordance with this Article.
SECTION 1402. Repayment of Securities.
Each Security which is subject to repayment in whole or in part at the option
of the Holder thereof on a Repayment Date shall be repaid at the applicable
Repayment Price together with interest accrued to such Repayment Date as
specified pursuant to Section 301.
SECTION 1403. Exercise of Option; Notice.
Each Holder desiring to exercise his option for repayment shall, as conditions
to such repayment, surrender the Security to be repaid together with all
coupons, if any, appertaining thereto maturing after the Repayment Date and with
written notice of the exercise of such option at any office or agency of the
Company in a Place of Payment, not less than 15 nor more than 30 days prior to
the Repayment Date. Such notice, which shall be irrevocable, shall identify the
Security to be repaid and shall specify the principal amount of such Security to
be repaid, which shall be not less than the minimum authorized denomination for
such Security or an integral multiple thereof and, in the case of a partial
repayment of the Security, the denomination or denominations of the Security or
Securities to be issued to the Holder for the portion of the principal of the
Security surrendered which is not to be repaid.
Any Security which is to be repaid only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the repayment of Securities shall relate, in the case of
any Security repaid or to be repaid only in part, to the portion of the
principal of such Security which has been or is to be repaid.
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SECTION 1404. Securities Payable on the Repayment Date.
Notice of exercise of the option of repayment having been given and the
Securities so to be repaid having been surrendered as aforesaid, such Securities
shall, on the Repayment Date, become due and payable at the Repayment Price
therein specified and from and after such date (unless the Company shall default
in the payment of Repayment Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for repayment in
accordance with Section 1403, such Security shall be paid by the Company at the
Repayment Price, together with accrued interest to the Repayment Date; provided,
however that installments of interest on Securities whose Stated Maturity is on
or prior to the Repayment Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security duly surrendered for repayment shall not be so paid, the
principal and any premium shall, until paid, bear interest from the Repayment
Date at the rate prescribed therefor in the Security.
--------------------------
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
-68-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
MICRON ELECTRONICS, INC.
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[SEAL]
Attest:
___________________________________
NORWEST BANK MINNESOTA, N.A.
By: _____________________________________
Name: ___________________________________
Title: __________________________________
[SEAL]
Attest:
___________________________________
-69-
<PAGE>
Exhibit 5.1
October 18, 1996
Micron Electronics, Inc.
900 E. Karcher Road
Nampa, Idaho 83687-3045
Re: Micron Electronics, Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3,
including Amendment No. 1 thereto (the "Registration Statement"), filed or to be
filed by Micron Electronics, Inc., a Minnesota corporation (the "Company"), with
the Securities and Exchange Commission in connection with the registration
pursuant to the Securities Act of 1933, as amended (the "Act"), of the Company's
debt securities (the "Debt Securities") and shares of the Company's Common
Stock, $0.01 par value per share (the "Common Stock"), with an aggregate
offering price of up to $325,000,000 or the equivalent thereof in one or more
foreign currencies or composite currencies. The Debt Securities and the Common
Stock are to be sold from time to time as set forth in the Registration
Statement, the Prospectus contained therein (the "Prospectus") and the
supplements to the Prospectus (the "Prospectus Supplements"). The Debt
Securities are to be issued pursuant to an Indenture, which has been filed as an
exhibit to the Registration Statement (the "Indenture") to be entered into
between the Company and Norwest Bank Minnesota, N.A., as Trustee (the
"Trustee"). The shares of Common Stock may be issued and sold by the Company or
may be sold by certain shareholders of the Company (the "Selling Shareholders")
who are named in the Registration Statement or the Prospectus. The shares of
Common Stock are to be sold pursuant to an Underwriting Agreement (Common Stock)
(the "Common Stock Underwriting Agreement") and the Debt Securities are to be
sold pursuant to an Underwriting Agreement (Debt Securities) (the "Debt
Securities Underwriting Agreement"), in substantially the respective forms filed
as exhibits to the Registration Statement. The Debt Securities are to be issued
in the form filed as an exhibit to the Registration Statement.
We have examined instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed
<PAGE>
Micron Electronics, Inc.
October 18, 1996
Page 2
(a) the authenticity of original documents and the genuineness of all
signatures, (b) the conformity to the originals of all documents submitted to us
as copies and (c) the truth, accuracy, and completeness of the information,
representations and warranties contained in the records, documents, instruments
and certificates we have reviewed. In addition, we have consulted with
Minnesota counsel with respect to certain aspects of Minnesota law.
Based on such examination, we are of the opinion that:
1. When the issuance of Debt Securities has been duly authorized by
appropriate corporate action and the Debt Securities, in the form filed as an
exhibit to the Registration Statement, have been duly completed, executed,
authenticated and delivered in accordance with the Indenture and sold pursuant
to the Debt Securities Underwriting Agreement and as described in the
Registration Statement, any amendment thereto, the Prospectus and any Prospectus
Supplement relating thereto, the Debt Securities will be legal, valid and
binding obligations of the Company, entitled to the benefits of such Indenture.
2. When the issuance of the shares of Common Stock has been duly
authorized by appropriate corporate action and the shares of Common Stock have
been duly issued, sold and delivered in accordance with the Common Stock
Underwriting Agreement and as described in the Registration Statement, any
amendment thereto, the Prospectus and the Prospectus Supplement relating
thereto, the shares of Common Stock will be legally issued, fully paid and
nonassessable.
3. The shares of Common Stock that may be sold by Selling Shareholders
pursuant to the Underwriting Agreement have been legally issued and are fully
paid and nonassessable.
Our opinion that any document is legal, valid and binding is qualified as
to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the rights of creditors generally; and
(b) general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief, regardless
of whether such enforceability is considered in a proceeding in equity or at
law.
<PAGE>
Micron Electronics, Inc.
October 18, 1996
Page 3
We hereby consent to the filing of this opinion as an exhibit to the above-
referenced Registration Statement and to the use of our name wherever it appears
in the Registration Statement, the Prospectus, the Prospectus Supplement, and in
any amendment or supplement thereto. In giving such consent, we do not believe
that we are "experts" within the meaning of such term as used in the Act or the
rules and regulations of the Securities and Exchange Commission issued
thereunder with respect to any part of the Registration Statement, including
this opinion as an exhibit or otherwise.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI, P.C.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
registration statement on Form S-3 to be filed on October 18, 1996 of our
report, dated September 19, 1996, on our audits of the financial statements
and financial statement schedule of Micron Electronics, Inc., as of August 29,
1996 and August 31, 1995, and for each of the three years in the period ended
August 29, 1996. We also consent to the reference to our firm under the
caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boise, Idaho
October 18, 1996
