Exhibit 1
CONFIDENTIAL
CERTAIN INFORMATION HAS BEEN REDACTED.
CONFIDENTIAL TREATMENT REQUIRED.
SECURITIES PURCHASE AGREEMENT
MICRON TECHNOLOGY, INC.
INTEL CORPORATION
October 15, 1998
TABLE OF CONTENTS
1. DEFINITIONS................................................ 1
1.1 Certain Defined Terms................................. 1
1.2 Index of Other Defined Terms.......................... 4
2. AGREEMENT TO PURCHASE AND SELL SECURITIES.................. 5
2.1 Agreement to Purchase and Sell Securities............. 5
2.2 The Closing........................................... 5
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 5
3.1 Organization Good Standing and Qualification.......... 5
3.2 Capitalization........................................ 6
3.3 Due Authorization..................................... 6
3.4 Valid Issuance of Securities.......................... 6
3.5 Compliance with Securities Laws....................... 7
3.6 Governmental Consents................................. 7
3.7 Non-Contravention..................................... 7
3.8 Litigation............................................ 8
3.9 Compliance with Law and Charter Documents............. 8
3.10 SEC Documents......................................... 8
3.11 Absence of Certain Changes Since Balance Sheet........ 9
3.12 RDRAM Device Specification Modifications.............. 10
3.13 Full Disclosure....................................... 10
4. REPRESENTATIONS AND WARRANTIES OF INTEL.................... 10
4.1 Investigation; Economic Risk.......................... 10
4.2 Purchase for Own Account.............................. 10
4.3 Exempt from Registration; Restricted Securities....... 10
i
4.4 Accredited Investor................................... 11
4.5 Legends............................................... 11
4.6 Organization Good Standing and Qualification.......... 11
4.7 Due Authorization..................................... 11
4.8 Governmental Consents................................. 11
4.9 Non-Contravention..................................... 12
5. AFFIRMATIVE COVENANTS OF THE COMPANY....................... 12
5.1 Use of Proceeds....................................... 12
5.2 Authorization of Class A Common Stock................. 12
5.3 Reports of Qualified Expenditures..................... 12
5.4 Cooperation in HSR Act Filings........................ 12
5.5 Audit................................................. 12
6. CLOSING CONDITIONS......................................... 13
6.1 Conditions to Intel's Obligations..................... 13
6.2 Conditions to the Company's Obligations............... 14
7. CONFIDENTIALITY OBLIGATIONS................................ 15
7.1 Obligations........................................... 15
7.2 Certain Definitions................................... 15
7.3 Non-Disclosure of Agreements.......................... 15
7.4 Public Announcements.................................. 16
7.5 Third Party Information............................... 16
7.6 Other Disclosures..................................... 16
8. MISCELLANEOUS.............................................. 16
8.1 Governing Law......................................... 16
8.2 Survival.............................................. 16
8.3 Successors and Assigns................................ 16
ii
8.4 Entire Agreement...................................... 16
8.5 Notices............................................... 16
8.6 Amendments............................................ 17
8.7 Delays or Omissions................................... 17
8.8 Legal Fees............................................ 17
8.9 Titles and Subtitles.................................. 18
8.10 Counterparts.......................................... 18
8.11 Severability.......................................... 18
8.12 Dispute Resolution.................................... 18
8.13 No Third Parties Benefited............................ 18
8.14 Meaning of Include and Including...................... 18
8.15 Fees, Costs and Expenses.............................. 18
8.16 Competition........................................... 18
iii
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is
entered into as of October 15, 1998 by and between Micron
Technology, Inc., a Delaware corporation (the "Company" or the
"Corporation") and Intel Corporation, a Delaware corporation
("Intel").
WHEREAS, Intel is willing, pursuant to the terms and
conditions of this Agreement, to purchase from the Company for five
hundred million dollars ($500,000,000) Rights which are exercisable
for shares of a new class of common stock convertible into regular
common stock of the Company at such time as the new class of common
stock has been created and, until such time, for shares of regular
common stock of the Company;
WHEREAS, at the closing of the transactions contemplated
hereby, the Company and Intel will enter into the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 Certain Defined Terms; Interpretation. The following
terms shall have the following respective meanings.
"Affiliate" shall mean, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common
control with, such other Person. For purposes of this definition,
"control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise; the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" shall mean any day on which commercial banks
are not authorized or required to close in either Boise, Idaho or
San Francisco, California.
"Capital Expenditures" shall mean the sum of all expenditures
paid or, with respect to equipment that is in use, accrued that, in
accordance with U.S. generally accepted accounting principles,
should be included in or reflected by the property, plant or
equipment or similar fixed asset account reflected in the balance
sheet of the applicable person.
"Certificate of Amendment" shall mean the Certificate of
Amendment of the Certificate of Incorporation of the Company
authorizing the Class A Common Stock and defining the rights,
preferences and privileges with respect thereto substantially in
the form attached hereto as Exhibit D.
"Class A Common Stock" shall mean shares of Class A Common
Stock of the Company having the preferences and other rights set
forth in the Certificate of Amendment.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"First Minimum Production Milestone". The First Minimum
Production Milestone requires that the Company and its subsidiaries
build and have available to ship (including those actually shipped)
an aggregate number of RDRAM devices in [________] equal to the
First Minimum Required Production.
"First Minimum Required Production" shall mean a number of
RDRAM units equal to the lower of (i) [_______] units of RDRAM;
(ii) Intel's Percentage Call on Capacity with respect to the
Company's overall output of discrete memory components (measured in
accordance with Section 7.0 of the Supply Agreement), regardless of
the actual production of RDRAM devices and (iii) the number of
units represented by [___]% of the reasonably projected memory
requirements for Intel's RDRAM unique chip set production, net of
MTH devices (as defined in the Supply Agreement).
"First Production Milestone Date" shall mean [_______], unless
postponed or waived in accordance with the provisions of Section
7(f) of the Rights Agreement or Section 3.f of the Certificate of
Amendment, in which case such date shall be the date established in
accordance with such sections, unless waived in its entirety.
"HSR Act" shall mean ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Maximum Adjustment Amount" shall mean $[_______].
"Maximum FGI" shall mean [______] RDRAM units.
"Maximum FGI Date" shall mean [______].
"Maximum Percentage" shall mean [___]% of the total number of
shares of Common Stock outstanding at October 19, 1998.
"Maximum Shares" shall mean [______] shares of Common Stock
(appropriately adjusted to reflect the effect of stock splits,
reclassifications, stock dividends, recapitalizations, combinations
or similar events affecting the Common Stock occurring after
October 15, 1998).
"Minimum Qualified Expenditures" shall mean [________] dollars
($[___]).
"Qualified Expenditures" shall mean the sum of all
expenditures by the Company and its subsidiaries (including any
such expenditures subsequent to May 28, 1998 and prior to October
19, 1998 not to exceed $[____]) and all expenditures by any joint
ventures from the date the Company is or becomes a party (up to a
maximum of $[_____] for each of not more than two such joint
ventures provided that the Company controls the output of such
joint ventures, but in any event including KTI Semiconductor
Limited and TECH Semiconductor Singapore Pte. Ltd.), which are
Capital Expenditures for the development, creation or expansion of
manufacturing capacity for RDRAM or other devices using 0.18 or
smaller micron processes and which capacity is located in
facilities which are on the Company's roadmap for conversion to
0.18 micron or smaller processes, or volume manufacturing capacity
for RDRAM devices (including assembly and test of such devices)
(including equipment initially installed for production at lower
density
process parameters (e.g., 0.21 micron) which is convertible to 0.18
micron or smaller processes and which is located in facilities
which are on the Company's roadmap for conversion to 0.18 micron or
smaller processes) or which are necessary research and development
expenditures for the development of RDRAM up to a maximum of
$[_____] which are not otherwise includable as Capital
Expenditures. Expenditures for capitalized leases will constitute
Qualified Expenditures but only for leases of new equipment
(payments with respect to previously leased equipment will not
qualify).
"Person" shall mean individual, corporation, company,
voluntary association, partnership, joint venture, limited
liability company, trust, estate, unincorporated organization,
governmental authority or other entity.
"Required Qualified Expenditures" shall mean [________]
dollars ($[_____]).
"RDRAM" means an integrated circuit with a principal function
of memory storage which is a dynamic random access memory and which
incorporates Rambus' direct RDRAM interface technology licensed to
the Company by Rambus, Inc. References to numbers of units or
devices of RDRAM or Rambus shall mean the number of RDRAM or Rambus
units or devices stated in [________] (regardless of the actual
memory levels of the individual units or devices).
"Rights" shall mean the securities issuable pursuant to the
Stock Rights Agreement attached to this Agreement as Exhibit A and
having the rights, preferences, privileges and restrictions defined
therein.
"Rights Agreement" shall mean the Stock Rights Agreement
attached to this Agreement as Exhibit A to be executed and
delivered by the Company and Intel at or prior to the Closing.
"Rights and Restrictions Agreement" shall mean the Securities
Rights and Restrictions Agreement in the form attached hereto as
Exhibit B to be executed and delivered by the Company and Intel at
or prior to the Closing.
"SEC" shall mean the Securities and Exchange Commission.
Second Minimum Production Milestone. The Second Minimum
Production Milestone requires that the Company and its subsidiaries
build and have available to ship (including those actually shipped)
an aggregate number of RDRAM devices in [_________], equal to the
Second Minimum Required Production, unless modified in accordance
with the provisions of Section 7(e) of the Rights Agreement or 3.e
of the Certificate of Amendment, in which case such milestone shall
be as so modified.
"Second Minimum Required Production" shall mean a number of
RDRAM units equal to the lower of (i) [________] units of RDRAM;
(ii) Intel's Percentage Call on Capacity (as defined in the Supply
Agreement) with respect to the Company's overall output of discrete
memory components (measured in accordance with Section 7.0 of the
Supply Agreement), regardless of the actual production of RDRAM
devices and (iii) the number of units represented by [___]% of the
reasonably projected memory requirements for Intel's RDRAM unique
chip set production, net of MTH devices (as defined in the Supply
Agreement), unless modified in accordance with the provisions of
Section 3.e of the Certificate of Amendment.
"Second Production Milestone Date" shall mean [______], unless
postponed or waived in accordance with the provisions of Section
7(f) of the Rights Agreement or Section 3.f of the Certificate of
Amendment, in which case such date shall be the date established in
accordance with such sections, unless waived in its entirety.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.
"Supply Agreement" shall mean the Supply Agreement in the form
attached to this Agreement as Exhibit C to be executed and
delivered by the Company and Intel at or prior to the Closing.
"Volume Production" shall mean the production of [________]
per month of RDRAM devices.
1.2 Index of Other Defined Terms. In addition to the terms
defined above, the following terms shall have the respective
meanings given thereto in the sections indicated below:
Defined Term Section
"Action" 3.8
"Agreement" Preamble
"Audited Financial Statements" 3.10(b)
"Balance Sheet Date" 3.10(b)
"Closing" 2.2
"Company" Preamble
"Confidential Information" 7.2
"Disclosure Letter" 3
"Form 10-K" 3.10(a)
"Form 10-Q's" 3.10(a)
"GAAP" 3.10(b)
"Intel" Preamble
"Material Adverse Effect" 3.1
"SEC Documents" 3.10(a)
"Transaction Agreements" 7.2
2. AGREEMENT TO PURCHASE AND SELL SECURITIES.
2.1 Agreement to Purchase and Sell Securities. The Company
hereby agrees to issue to Intel at the Closing (as defined below)
and Intel agrees to purchase from the Company at the Closing,
Rights representing in the aggregate the right to purchase a number
of shares of Class A Common Stock equal to $500 million divided by
$31.625, for an aggregate purchase price of $500 million (the
"Purchase Price").
2.2 The Closing. The purchase and sale of the Rights shall
take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. California
time, on October 19, 1998, or at such other time and place as the
Company and Intel mutually agree upon (which time and place is
referred to in this Agreement as the "Closing"). At the Closing,
the Company will deliver to Intel certificates representing the
Rights being purchased, against delivery to the Company by Intel of
the consideration set forth in Section 2.1
by wire transfer of funds to an account designated by the Company
at least two (2) Business Days prior to the Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Intel that the
statements in this Section 3 are true and correct, except as set
forth in the Disclosure Letter from the Company dated the date
hereof (the "Disclosure Letter") or disclosed in the SEC Documents
(as defined below):
3.1 Organization Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
corporate power and authority required to (a) carry on its business
as presently conducted, and (b) enter into this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement, to issue the Rights, and to consummate the
transactions contemplated hereby and thereby. The Company is
qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means a material adverse effect, or a group of such
effects which are related, on the business, operations, financial
condition or results of operations, of the applicable party and its
subsidiaries, taken as a whole.
3.2 Capitalization. The authorized and outstanding capital
stock of the Company at October 8, 1998, without giving effect to
the transactions contemplated by this Agreement, is as set forth in
the Disclosure Letter or the SEC Documents. All outstanding shares
of capital stock have been duly authorized, and all such issued and
outstanding shares have been validly issued and are fully paid and
nonassessable. The Disclosure Letter or the SEC Documents include
information regarding equity securities reserved for issuance to
officers, directors, employees or independent contractors or
affiliates of the Company under the Company's employee stock option
and purchase plans and upon conversion of convertible securities.
Except as set forth in the Disclosure Letter or the SEC Documents,
there are no other equity securities, options, warrants, calls,
rights, commitments or agreements of any character to which the
Company is a party or by which it is bound obligating the Company
to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company to grant,
extend or enter into any such equity security, option, warrant,
call, right, commitment or agreement.
3.3 Due Authorization. The Company has the requisite
corporate power and authority to enter into this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement, and performance by the Company of its obligations
hereunder and thereunder, have been duly authorized by all
necessary corporate action on the part of the Company (including
its directors and stockholders), except for stockholder approval of
the Certificate of Amendment and the issuance of the Class A Common
Stock pursuant thereto. This Agreement constitutes, and the Rights
Agreement and the Rights and Restrictions Agreement, when executed
and delivered by the parties thereto, will constitute, valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except (a) as
may be limited by (i) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of law governing the availability of equitable
remedies and (b) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of
public policy thereunder.
3.4 Valid Issuance of Securities.
(a) Valid Issuance and Enforceability of Rights. The
Rights have been duly authorized and, when executed in accordance
with the provisions of the Rights Agreement and delivered to and
paid for Intel in accordance with the provisions of this Agreement,
will be valid and binding obligations of the Company, enforceable
in accordance with their terms, except (a) as may be limited by (i)
applicable bankruptcy, insolvency, reorganization, or other laws of
general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of laws
governing the availability of equitable remedies and (b) as rights
to indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.
(b) Valid Issuance of Common Stock. The shares of
Common Stock issuable upon exchange or exercise of the Rights have
been duly authorized and reserved, and when issued upon exchange or
exercise of the Rights in accordance with the terms of the Rights
Agreement, will be duly and validly issued, fully paid and
nonassessable. Upon or prior to filing of the Certificate of
Amendment, the shares of Common Stock issuable upon conversion of
the Class A Common Stock will have been duly authorized and
reserved, and upon conversion of the Class A Common Stock pursuant
to the terms of the Certificate of Amendment, will be duly and
validly issued, fully paid and nonassessable.
(c) Valid Issuance of Class A Common Stock. The shares
of Class A Common Stock issuable upon exchange or exercise of the
Rights have been duly authorized by the Board of Directors of the
Company. Assuming due authorization by the stockholders of the
Company and the filing by the Company of the Certificate of
Amendment with the Secretary of State of the State of Delaware, the
shares of Class A Common Stock issuable upon exchange or exercise
of the Rights will be duly reserved for issuance by the Company,
and when issued upon exchange or exercise of the Rights in
accordance with the terms of the Rights Agreement, will be duly and
validly issued, fully paid and nonassessable.
3.5 Compliance with Securities Laws. Assuming the accuracy
of the representations made by Intel in Section 4 hereof, the
Rights and the shares of Class A Common Stock or Common Stock
issuable upon exercise or exchange of the Rights will be issued to
Intel in compliance with applicable exemptions from (i) the
registration and prospectus delivery requirements of the Securities
Act and (ii) the registration and qualification requirements of all
applicable securities laws of the states of the United States.
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated
by this Agreement, except: (i) compliance with the HSR Act which
may be required for the exercise of the Rights to acquire Common
Stock; (ii) the filing of a report on Form 8-K by the Company with
the SEC following the Closing; (iii) the filing of such
qualifications or filings under the Securities Act and the
regulations thereunder and all applicable state securities laws as
may be required in connection with the transactions contemplated by
this Agreement; (iv) the listing of the Common Stock issuable upon
exercise or exchange of the Rights or conversion of the Class A
Common Stock on the New York Stock
Exchange; (v) the filing of the Certificate of Amendment with the
Secretary of State of the State of Delaware; and (vi) as expressly
required or contemplated by the terms of the Rights and
Restrictions Agreement. All such qualifications and filings in
connection with the initial issuance of the Rights will have been
made or be effective on the Closing.
3.7 Non-Contravention. The execution, delivery and
performance of this Agreement, the Rights Agreement and the Rights
and Restrictions Agreement by the Company, and the consummation by
the Company of the transactions contemplated hereby and thereby, do
not and will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of the Company, as amended; (ii) constitute
a violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Company; or (iii)
constitute a default or require any consent under, give rise to any
right of termination, cancellation or acceleration of, or to a loss
of any benefit to which the Company is entitled under, or result in
the creation or imposition of any lien, claim or encumbrance on any
assets of the Company under, any contract to which the Company is a
party or any permit, license or similar right relating to the
Company or by which the Company may be bound, except in the case of
clause (ii) and (iii) as, individually or in the aggregate, would
not have a Material Adverse Effect.
3.8 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending: (a) against the
Company, properties or assets or, to the best of the Company's
knowledge, against any officer, director or employee of the Company
in connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of, the Company,
which the Company believes is reasonably likely to have a Material
Adverse Effect, or (b) that seeks to prevent, enjoin, alter or
delay the transactions contemplated by this Agreement. The Company
is not a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which it believes is reasonably likely to have a
Material Adverse Effect. No Action by the Company is currently
pending nor does the Company intend to initiate any Action which it
believes is reasonably likely to have a Material Adverse Effect.
3.9 Compliance with Law and Charter Documents. The Company
is not in violation or default of any provisions of its Certificate
of Incorporation or Bylaws, both as amended. The Company has
complied and is in compliance with all applicable statutes, laws,
and regulations and executive orders of the United States of
America and all states, foreign countries and other governmental
bodies and agencies having jurisdiction over the Company's business
or properties, except for any violations that would not, either
individually or in the aggregate, have a Material Adverse Effect.
3.10 SEC Documents.
(a) Reports. The Company has furnished or made
available to Intel prior to the date hereof copies of its Annual
Report on Form 10-K for the fiscal year ended August 28, 1997
("Form 10-K"), its Quarterly Reports on Form 10-Q for the fiscal
quarters ended November 30, 1997, February 28, 1998 and May 28,
1998 (the "Form 10-Q's"), and all other registration statements,
reports and proxy statements filed by the Company with the SEC on
or after October 31, 1997 (the Form 10-K, the Form 10-Q's and such
registration statements, reports and proxy statements are
collectively referred to herein as the "SEC Documents"). Each of
the SEC Documents, as of the respective date thereof (or if amended
or superseded by a filing prior to the closing date of this
Agreement, then on the date of such filing), did not, and each of
the registration statements, reports and proxy statements filed by
the Company with the SEC after
the date hereof and prior to the Closing will not, as of the date
thereof (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing), contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading. The Company is not a party to any material contract,
agreement or other arrangement which was required to have been
filed as an exhibit to the SEC Documents that was not so filed.
(b) Financial Statements. The SEC Documents include the
Company's audited financial statements (the "Audited Financial
Statements") for the fiscal year ended August 31, 1997, and its
unaudited financial statements for the nine-month period ended May
31, 1998 (the "Balance Sheet Date"). Since the Balance Sheet Date,
the Company has duly filed with the SEC all registration statements
reports and proxy statements required to be filed by it under the
Exchange Act and the Securities Act. The audited and unaudited
consolidated financial statements of the Company included in the
SEC Documents filed prior to the date hereof fairly present, in
conformity with generally accepted accounting principles ("GAAP")
(except as permitted by Form 10-Q) applied on a consistent basis
(except as may be indicated in such financial statements or the
notes thereto), the consolidated financial position of the Company
and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject to normal year-end audit adjustments in
the case of unaudited interim financial statements).
3.11 Absence of Certain Changes Since Balance Sheet . Since
the Balance Sheet Date, except as disclosed in or contemplated by
the SEC Documents, the business and operations of the Company have
been conducted in the ordinary course consistent with past
practice, and there has not been:
(a) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with
respect to any shares of capital stock of the Company or any
repurchase, redemption or other acquisition by the Company or any
subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(b) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences that have not
resulted, and are not expected to result, in a Material Adverse
Effect;
(c) any waiver by the Company of a valuable right or of
a material debt owed to it, except for such waivers that have not
resulted and are not expected to result, in a Material Adverse
Effect;
(d) any material change or amendment to, or any waiver
of any material rights under a material contract or arrangement by
which the Company or any of its assets. or properties is bound or
subject, except for changes, amendments or waivers that are
expressly provided for or disclosed in this Agreement or that have
not resulted, and are not expected to result, in a Material Adverse
Effect;
(e) any change by the Company in its accounting
principles, methods or practices or in the manner it keeps its
accounting books and records, except any such change required by a
change in GAAP; and
(f) any other event or condition of any character,
except for such events and conditions that have not resulted,
either individually or collectively, in a Material Adverse Effect.
3.12 RDRAM Device Specification Modifications. As of the date
of this Agreement the Company is not aware of any RDRAM device
specification modifications that the Company believes require
unreasonable process modifications.
3.13 Full Disclosure. The information contained in this
Agreement, the Disclosure Letter and the SEC Documents with respect
to the business, operations, results of operations and financial
condition of the Company, and the transactions contemplated by this
Agreement, taken together, are true and complete in all material
respects and do not omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INTEL.
Intel represents and warrants to the Company as follows:
4.1 Investigation; Economic Risk. Intel has received or has
had full access to all of the information it considers necessary or
appropriate to make an informed investment decision with respect to
the Rights that are convertible or exercisable into Class A Common
Stock or Common Stock to be purchased by Intel under this
Agreement. Intel further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and
conditions of the offering of the Rights and the Class A Common
Stock or Common Stock into which they are convertible or
exercisable and to obtain additional information (to the extent the
Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information
furnished to the investor or to which Intel had access. The
foregoing, however, does not in any way limit or modify the
representations and warranties made by the Company in Section 3.
Intel understands that the purchase of the Rights that are
exchangeable or exercisable into Class A Common Stock or Common
Stock involves substantial risk. Intel acknowledges that it is
able to fend for itself in the transactions contemplated by this
Agreement and has the ability to bear the economic risks of its
investment pursuant to this Agreement and has such knowledge and
experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Rights
and the Class A Common Stock or Common Stock into which they are
convertible or exercisable and protecting its own interests in
connection with this investment.
4.2 Purchase for Own Account. The Rights, Class A Common
Stock and Common Stock which Intel may acquire will be acquired for
Intel's own account, not as a nominee or agent, and not with a view
to or in connection with the sale or distribution of any part
thereof.
4.3 Exempt from Registration; Restricted Securities. Intel
understands that the sale of the Rights and the issuance of the
Class A Common Stock or Common Stock upon exercise or exchange
thereof will not be registered under the Securities Act on the
ground that the sale provided for in this Agreement is exempt from
registration under of the Securities Act, and that the reliance of
the Company on such exemption is predicated in part on Intel's
representations set forth in this Agreement. Intel understands
that the Rights and the Class A Common Stock or Common Stock
issuable upon exercise or exchange thereof are restricted
securities within the meaning of Rule 144 under the Act, and must
be held indefinitely unless they are subsequently registered or an
exemption from such registration is available. Intel
understands that the
Company is under no obligation to register any of the securities
sold hereunder except as provided in the Rights and Restrictions
Agreement.
4.4 Accredited Investor. Intel is an "accredited investor"
as that term is defined in Rule 501(a)(8) of Regulation D as
promulgated by the SEC under the Securities Act.
4.5 Legends. Intel agrees that the Rights, Class A Common
Stock and the Common Stock issuable upon exercise or conversion
thereof will bear legends and be subject to the restrictions on
transfer as provided in the Rights and Restrictions Agreement. In
addition, Intel agrees that the Company may place stop transfer
orders with its transfer agents with respect to such instruments.
The appropriate portion of the legend shall be removed in
accordance with the provisions of the Rights and Restrictions
Agreement and the stop transfer orders shall be removed promptly
upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such stop orders are
not required to ensure compliance with the Securities Act.
4.6 Organization Good Standing and Qualification. Intel is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all corporate power
and authority required to (a) carry on its business as presently
conducted, and (b) enter into this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement and
to consummate the transactions contemplated hereby and thereby.
4.7 Due Authorization. Intel has the requisite corporate
power and authority to enter into this Agreement, the Rights
Agreement, the Rights and Restrictions Agreement and the Supply
Agreement and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement, and
performance by Intel of its obligations hereunder and thereunder,
have been duly authorized by all necessary corporate action on the
part of Intel. This Agreement constitutes, and the Rights
Agreement and the Rights and Restrictions Agreement, when executed
and delivered by the parties thereto, will constitute, valid and
legally binding obligations of Intel, enforceable against the Intel
in accordance with their respective terms, except (a) as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or
others laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) the effect of
rules of law governing the availability of equitable remedies and
(b) as rights to indemnity or contribution may be limited under
federal or state securities laws or by principles of public policy
thereunder.
4.8 Governmental Consents. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of Intel is required in
connection with the consummation of the transactions contemplated
by this Agreement, except: (i) compliance with the HSR Act which
may be required for the exercise of the Rights to acquire Common
Stock; and (ii) as expressly required or contemplated by the terms
of the Rights and Restrictions Agreement.
4.9 Non-Contravention. The execution, delivery and
performance of this Agreement, the Rights Agreement and the Rights
and Restrictions Agreement by Intel, and the consummation by Intel
of the transactions contemplated hereby and thereby, do not and
will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of Intel, as amended; (ii) constitute a
violation of any provision of any federal, state, local or foreign
law binding upon or applicable to Intel; or (iii) constitute a
default or require any consent under, give rise to any right of
termination, cancellation or acceleration of, or to a loss of any
benefit to which Intel is entitled under, or result in the creation
or imposition of any lien, claim or encumbrance on any assets of
Intel under, any contract to which Intel is a party or any permit,
license or similar right relating to Intel or by which Intel may be
bound, except in the case of clause (ii) and (iii) as, individually
or in the aggregate, would not have a Material Adverse Effect.
5. AFFIRMATIVE COVENANTS OF THE COMPANY.
The Company covenants to Intel as follows:
5.1 Use of Proceeds. The Company will use the proceeds from
the sale of the Rights pursuant to this Agreement for Qualified
Expenditures.
5.2 Authorization of Class A Common Stock. The Company will
use reasonable efforts to obtain stockholder approval of an
amendment to its Certificate of Incorporation at its next annual
stockholders meeting and will promptly thereafter cause a
Certificate of Amendment substantially in the form attached hereto
as Exhibit D to be filed with the Delaware Secretary of State of
the State of Delaware.
5.3 Reports of Qualified Expenditures. The Company shall
provide to Intel, in a mutually acceptable form, on a quarterly
basis commencing December 31, 1998, a report of Qualified
Expenditures made, sufficient to permit an audit of such
expenditures pursuant to Section 7(m) of the Rights Agreement.
5.4 Cooperation in HSR Act Filings. In the event of a
proposed exercise of Rights to acquire Common Stock or voluntary
conversion of the Class A Common Stock which would require a filing
by Intel under the HSR Act, the Company will cooperate with Intel
and use reasonable efforts to comply with any applicable
requirements of the HSR Act; provided, however, that the Company
shall not be under any obligation to comply with any request that
it reasonably determines is unduly burdensome. Any filing fees
under the HSR Act shall be paid by Intel.
5.5 Audit. The Company will maintain relevant records to
support all Qualified Expenditures and Production milestones. Such
records will be retained in accordance with the Company's normal
record retention policies. Upon written request, the Company will
make available to Intel documents and other information that are
reasonably necessary to verify the Company's compliance with the
terms of the Transaction Agreements; provided that Intel enters
into an agreement with the Company to maintain in confidence the
Company's confidential information disclosed pursuant to the audit,
to the extent that existing agreements do not cover such
information. Intel may also request in writing that an audit be
performed by an independent auditor with respect to the Qualified
Expenditures and Production milestones necessary to verify the
Special Conversion Adjustments. If Intel elects to have such an
audit performed, the Company will make available to such
independent auditor, financial, technical and other information and
records relevant to auditing the Qualified Expenditures and
Production milestones in order to verify the Special Conversion
Adjustments that may be reasonably requested by such independent
auditor. The independent auditor selected shall be mutually
acceptable to Intel and the Company and compensated by Intel.
Prior to beginning such audit or receiving such information, the
independent auditor will enter into an agreement with the Company
to maintain in confidence the Company's confidential information.
The Company shall cooperate with the independent auditor in
responding to requests for the Company
information and records. The independent auditor will promptly
conduct and issue a report to the Company and Intel. If the
independent auditor determines that the Company has failed to
comply with any of the terms hereof being audited, such independent
auditor shall only disclose to Intel and the Company the results of
the audit without revealing the Company's confidential information.
If the independent auditor determines that a further Special
Conversion Adjustment is required hereunder, such auditor shall
only disclose in its audit report to the Company and Intel the (i)
amount of the additional Special Conversion Adjustment that is
required hereunder; and (ii) a calculation as to how such amounts
were actually determined, if applicable.
6. CLOSING CONDITIONS.
6.1 Conditions to Intel's Obligations. The obligations of
Intel to consummate the transactions contemplated by this Agreement
at the Closing are subject to the fulfillment or waiver, on or
before the Closing, of each of the following conditions:
(a) Representations and Warranties True. Each of
the representations and warranties of the Company contained in
Section 3 will be true and correct in all material respects on and
as of the date hereof and on and as of the date of the Closing,
with the same effect as though such representations and warranties
had been made as of the Closing.
(b) Performance. The Company will have performed
and complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and will have obtained
all approvals, consents and qualifications necessary to complete
the purchase and sale described herein.
(c) Compliance Certificate. The Company will have
delivered to the Intel at the Closing a certificate signed on its
behalf by its Chief Executive Officer or Chief Financial Officer
certifying that the conditions specified in Section 6.1(a) and (b)
hereof have been fulfilled.
(d) Securities Exemptions. The offer and sale of
the Rights to Intel pursuant to this Agreement and the Rights
Agreement will be exempt from the registration requirements of the
Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(e) Proceedings and Documents. All corporate and
other proceedings in connection with the transactions contemplated
at the Closing and all documents incident thereto will be
reasonably satisfactory in form and substance to Intel, and Intel
will have received all such counterpart originals and certified or
other copies of such documents as it may reasonably request. Such
documents shall include (but not be limited to) the following:
(i) Certified Charter Documents. A copy of the
Certificate of Incorporation certified as of a recent date by the
Secretary of State of Delaware as a complete and correct copy
thereof, and the Bylaws of the Company (as amended through the date
of the Closing), certified by the Secretary of the Company as true
and correct copies thereof as of the Closing.
(ii) Board Resolutions. A copy, certified by the
Secretary of the Company, of the resolutions of the Board of
Directors of the Company providing for the approval of the
transactions contemplated by this Agreement, the Rights Agreement,
the Rights and
Restrictions Agreement and the Supply Agreement and the issuance of
the Rights and the Class A Common Stock or Common Stock issuable
upon exercise or conversion thereof.
(f) Opinion of Company Counsel. Intel will have
received an opinion on behalf of the Company, dated as of the date
of the Closing, from counsel to the Company, in form and substance
reasonably satisfactory to Intel.
(g) Other Agreements. The Company will have executed
and delivered the Rights Agreement, the Rights and Restrictions
Agreement and the Supply Agreement.
6.2 Conditions to the Company's Obligations. The obligations
of the Company to consummate the transactions contemplated by this
Agreement at the Closing are subject to the fulfillment or waiver
on or before the Closing, of each of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of Intel contained in Section 4 will
be true and correct in all material respects on and as of the date
hereof and on and as of the date of the Closing with the same
effect as though such representations and warranties had been made
as of the Closing.
(b) Performance. Intel will have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it
on or before the Closing and will have obtained all approvals,
consents and qualifications necessary to complete the purchase and
sale described herein.
(c) Payment of Purchase Price. Intel will have
delivered to the Company the Purchase Price of the Rights as
specified in and in accordance with Section 2.1.
(d) Securities Exemptions. The offer and sale of the
Rights to Intel pursuant to this Agreement will be exempt from the
registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable
state securities laws.
(e) Other Agreements. Intel will have executed and
delivered the Rights Agreement, the Rights and Restrictions
Agreement and the Supply Agreement.
7. CONFIDENTIALITY OBLIGATIONS.
7.1 Obligations. Except to the extent required by law or
judicial order or except as provided herein, each party to this
Agreement will hold any of the other's Confidential Information (as
defined in the next paragraph) in confidence and will: (i) use the
same degree of care to prevent unauthorized disclosure or use of
the Confidential Information that the receiving party uses with its
own information of like nature (but in no event less than
reasonable care), (ii) limit disclosure of the Confidential
Information, including any materials regarding the Confidential
Information that the receiving party has generated, to such of its
employees and contractors as have a need to know the Confidential
Information to accomplish the purposes of this Agreement, and (iii)
advise its employees, agents and contractors of the confidential
nature of the Confidential Information and of the receiving party's
obligations under this Agreement and the Corporate Non-Disclosure
Agreement #19096.
7.2 Certain Definitions. For purposes of this Agreement, the
term "Confidential Information" refers to this Agreement, the
Rights Agreement, the Supply Agreement and the
Rights and Restrictions Agreement (collectively, the "Transaction
Agreements"). Any employee or contractor of the receiving party
having access to the Confidential Information will be required to
sign a non-disclosure agreement protecting the Confidential
Information if not already bound by such a non-disclosure
agreement.
7.3 Non-Disclosure of Agreements. Except to the extent
required by law or judicial order or except as provided herein,
neither party shall disclose the Transaction Agreements or any of
their terms without the other's prior written approval, which
approval will not be delayed or unreasonably withheld. Either
party may disclose the Transaction Agreements to the extent
required by law or judicial order, provided that if such disclosure
is pursuant to judicial order or proceedings, the disclosing party
will notify the other party promptly before such disclosure and
will cooperate with the other party to seek confidential treatment
with respect to the disclosure if requested by the other party and
provided further that if such disclosure is required pursuant to
the rules and regulations of any federal, state or local
organization, the parties will cooperate to seek confidential
treatment of the Transaction Agreements to the maximum extent
possible under law.
7.4 Public Announcements. Upon execution of this Agreement,
the parties will agree on the content of a joint press release
announcing the existence of the transactions contemplated by this
Agreement, which press release will be issued as mutually agreed by
the parties.
7.5 Third Party Information. Neither party will be required
to disclose to the other any confidential information of any third
party without having first obtained such third party's prior
written consent.
7.6 Other Disclosures. All confidential information
exchanged by the parties will be disclosed pursuant to the Intel
Corporation/Micron Technology, Inc. Corporate Non-Disclosure
Agreement #19096.
8. MISCELLANEOUS.
8.1 Governing Law. This Agreement shall be governed in all
respects by and construed in accordance with the laws of the State
of Delaware, without regard to provisions regarding choice of laws.
Jurisdiction shall be in the courts of the state of domicile of the
defending party to the original action.
8.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any
party hereto and the closing of the transactions contemplated
hereby, provided that the representations and warranties set forth
herein shall terminate as of the first anniversary of the date
hereof (other than with respect to any claims asserted prior to
such date, as to which they shall survive solely for the purpose of
resolving such claims until the resolution thereof).
8.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto. This Agreement and the
rights and obligations herein may not be assigned by Intel without
the prior written consent of the Company, except to a Qualified
Subsidiary (as defined in the Rights and Restrictions Agreement).
This Agreement and the rights and obligations herein may not be
assigned by the Company without the prior written consent of Intel.
8.4 Entire Agreement. This Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement, and
the agreements, exhibits and schedules referred to herein and
therein constitute the entire understanding and agreement between
the parties with regard to the subjects hereof and thereof;
provided, however, that nothing in this Agreement shall be deemed
to terminate or supersede the provisions of any confidentiality and
nondisclosure agreements executed by the parties hereto prior to
the date hereof, which agreements shall continue in full force and
effect until terminated in accordance with their respective terms.
8.5 Notices. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant
to this Agreement shall be in writing and shall be delivered to
the other party (a) in person; (b) by facsimile to the address and
number set forth below, when promptly followed up by another of the
delivery methods permitted by this Section 8.5; (c) by U.S. mail,
registered or certified, return receipt requested, postage prepaid
and addressed to the other party as set forth below; or (d) by a
national-recognized overnight delivery service that keeps records
of deliveries and attempted deliveries (such as FedEx), postage
prepaid, addressed to the parties as set forth below with next-
business-day delivery guaranteed, provided that the sending party
receives a confirmation of delivery from the delivery service
provider.
To Intel: To the Company:
Intel Corporation Micron Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇
▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Manager
Attn: Chief Financial
Officer
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇ Fax Number: (208) 308-
2900
with copies to: with copies to:
Intel Corporation Micron Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇
Attn: General Counsel ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: General Counsel
Fax Number: (208) 308-
4509
A party may change or supplement the addresses given above, or
designate additional addresses, for purposes of this Section 8.5 by
giving the other party written notice of the new address in the
manner set forth above.
8.6 Amendments. Any term of this Agreement may be amended
only with the prior written consent of the Company and Intel.
8.7 Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to the Company or to Intel,
upon any breach or default of any party hereto under this
Agreement, shall impair any such right, power or remedy of the
Company or Intel, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of any
similar breach or default thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of
the Company or Intel of any breach or default under this
Agreement or any waiver on the part of the Company or Intel of any
provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement, or by law
or otherwise afforded to the Company or Intel shall be cumulative
and not alternative.
8.8 Legal Fees. In the event of any action at law, suit in
equity or arbitration proceeding in relation to this Agreement or
any units or securities of the Company issued or to be issued, the
prevailing party shall be paid by the other party a reasonable sum
for attorney's fees and expenses for such prevailing party.
8.9 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.
8.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
8.11 Severability. Should any provision of this Agreement be
determined to be illegal or unenforceable, such determination shall
not affect the remaining provisions of this Agreement.
8.12 Dispute Resolution. The parties agree to negotiate in
good faith to resolve any dispute between them regarding this
Agreement. If the negotiations do not resolve the dispute to the
reasonable satisfaction of both parties, then each party shall
nominate one senior officer of the rank of Vice President or higher
as its representative. These representatives shall, within thirty
(30) days of a written request by either party to call such a
meeting, meet in person and alone (except for one assistant for
each party) and shall attempt in good faith to resolve the dispute.
If the disputes cannot be resolved by such senior managers in such
meeting, the parties agree that they shall, if requested in writing
by either party, meet within thirty (30) days after such written
notification for one day with an impartial mediator and consider
dispute resolution alternatives other than litigation. If an
alternative method of dispute resolution is not agreed upon within
thirty (30) days after the one day mediation, either party may
proceed as they see fit. This procedure shall be a prerequisite
before taking any additional action hereunder.
8.13 No Third Parties Benefited. This Agreement is made and
entered into for the protection and benefit of the parties hereto
and their permitted successors and assigns, and, except as
expressly provided herein, no other Person shall be a direct or
indirect beneficiary of or have any direct or indirect cause of
action or claim in connection with this Agreement or any of the
documents executed in connection herewith.
8.14 Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used. it shall be
deemed to mean "include, without limitation" or "including. without
limitation." as the case may be. and the language following
"include" or "including" shall not be deemed to set forth an
exhaustive list.
8.15 Fees, Costs and Expenses. All fees, costs and expenses
(including attorney's' fees and expenses) incurred by either party
hereto prior to the Closing in connection with the preparation,
negotiation and execution of this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement and
the consummation of the transactions contemplated hereby and
thereby (including the costs associated with any filings with, or
compliance with any of the requirements of, any governmental
authorities), shall be the sole and exclusive responsibility of
such party.
8.16 Competition. Nothing set forth herein shall be deemed to
preclude, limit or restrict the Company's or Intel's and their
respective Affiliates' ability to compete with the other.
IN WITNESS WHEREOF, the parties have executed this Securities
Purchase Agreement as of the date first written above.
INTEL CORPORATION. MICRON TECHNOLOGY,
INC.
By:/s/____________________ By:/s/____________________
Name: Name:
Title: Title:
{Signature Page to Securities Purchase Agreement}
EXHIBIT A
(Rights Agreement)
EXHIBIT B
(Rights and Restrictions Agreement)
EXHIBIT C
(Supply Agreement)
EXHIBIT D
(Form of Certificate of Amendment)
