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TABLE OF CONTENTS
Table of Contents
As filed with the Securities and Exchange Commission on April 28, 2010
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
NETWORK ENGINES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or organization)
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04-3064173
(I.R.S. Employer Identification Number)
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25 Dan Road
Canton, Massachusetts 02021
(781) 332-1000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)
Gregory A. Shortell
President and Chief Executive Officer
Network Engines, Inc.
25 Dan Road
Canton, Massachusetts 02021
(781) 332-1000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Philip P. Rossetti, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Tel: (617) 526-6000
Fax: (617) 526-5000
Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement
becomes effective.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box.
o
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.
ý
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.
o
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.
o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
o
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a
smaller reporting company)
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Smaller reporting company
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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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CALCULATION OF REGISTRATION FEE
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Title of each class of
securities to be registered(1)
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Maximum Aggregate
Offering Price(1)
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Amount of
Registration Fee(1)
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Common Stock, par value $0.01 per share
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(3)
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(3)
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Preferred Stock
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(3)
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(3)
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Debt Securities
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(3)
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(3)
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Depositary Shares(2)
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(3)
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(3)
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Purchase Contracts
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(3)
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(3)
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Purchase Units
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(3)
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(3)
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Warrants
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(3)
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(3)
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Total
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$40,000,000
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$2,852
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(1)
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An
indeterminate amount of the securities of each identified class is being registered as may from time to time be offered hereunder at indeterminate
prices, along with an indeterminate number of securities that may be issued upon exercise, settlement, exchange or conversion of securities offered or sold hereunder or that are represented by
depositary shares. Separate consideration may or may not be received for securities that are issuable upon conversion, exercise or exchange of other securities. In addition, the total amount to be
registered and the proposed maximum aggregate offering price are estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933,
as amended (the "Securities Act").
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(2)
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Each
depositary share will be issued under a deposit agreement, will represent an interest in a fractional share or multiple shares of preferred stock and
will be evidenced by a depositary receipt.
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(3)
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Not
required to be included in accordance with General Instruction II.D. of Form S-3.
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The information in this prospectus is not complete and may be changed. We may not sell these securities
until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to completion, dated April 28, 2010
$40,000,000
PRELIMINARY PROSPECTUS
Network Engines, Inc.
Common Stock
Preferred Stock
Debt Securities
Depositary Shares
Purchase Contracts
Purchase Units
Warrants
We may issue securities from time to time in one or more offerings. This prospectus describes the general terms of these securities and the
general manner in which these securities will be offered. We will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplements will also describe the
specific manner in which these securities will be offered and may also supplement, update or amend information contained in this document. You should read this prospectus and any applicable prospectus
supplement before you invest.
We
may offer these securities in amounts, at prices and on terms determined at the time of offering. The securities may be sold directly to you, through agents, or through underwriters
and dealers. If agents, underwriters or dealers are used to sell the securities, we will name them and describe their compensation in a prospectus supplement.
Our
common stock trades on the Nasdaq Global Market under the symbol NENG.
Investing in these securities involves certain risks. See "Risk Factors" included in any accompanying prospectus supplement and in the documents
incorporated by reference in this prospectus for a discussion of the factors you should carefully consider before deciding to purchase these securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2010
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, which we refer to as the
SEC, utilizing a "shelf" registration process. Under this shelf registration process, we may from time to time sell any combination of the securities described in this prospectus in one or more
offerings for an aggregate initial offering price of up to $40,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide one or more prospectus supplements that will contain
specific information about the terms of the offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the
accompanying prospectus supplement together with the additional information described under the heading "Where You Can Find More Information" beginning on page 2 of this prospectus.
You
should rely only on the information contained in or incorporated by reference in this prospectus, any accompanying prospectus supplement or in any related free writing prospectus
filed by us with the
SEC. We have not authorized anyone to provide you with different information. This prospectus and the accompanying prospectus supplement do not constitute an offer to sell or the solicitation of an
offer to buy any securities other than the securities described in the accompanying prospectus supplement or an offer to sell or the solicitation of an offer to buy such securities in any
circumstances in which such offer or solicitation is unlawful. You should assume that the information appearing in this prospectus, any prospectus supplement, the documents incorporated by reference
and any related free writing prospectus is accurate only as of their respective dates. Our business, financial condition, results of operations and prospects may have changed materially since those
dates.
Unless
the context otherwise indicates, references in this prospectus to "we," "our" and "us" refer, collectively, to Network Engines, Inc., a Delaware corporation, and its
consolidated subsidiaries.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to
the public over the Internet at the SEC's website at http://www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.nei.com. Our website is not a
part of this prospectus. You may also read and copy any document we file at the SEC's public reference room, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference room.
This
prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and
regulations. You should review the information and exhibits in the registration statement for further information on us and our consolidated subsidiaries and the securities we are offering. Statements
in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by
reference to these filings. You should review the complete document to evaluate these statements.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference much of the information we file with the SEC, which means that we can disclose important
information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we
are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in
this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously
incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below (File No. 000-30863) and any future filings we make
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act (in each case, other than those documents or the portions of those
documents not deemed to be filed) after the date of the initial registration statement and prior to effectiveness of the registration statement and until the offering of the securities under the
registration statement is terminated or completed:
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Annual Report on Form 10-K for the fiscal year ended September 30, 2009, including the
information specifically incorporated by reference into the Form 10-K from our definitive proxy statement for the 2010 Annual Meeting of Stockholders;
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Quarterly Report on Form 10-Q for the quarter ended December 31, 2009;
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Current Reports on Form 8-K filed December 23, 2009 and March 23, 2010; and
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The description of our common stock contained in our Registration Statement on Form 8-A filed on
June 21, 2000, including any amendments or reports filed for the purpose of updating such description.
You
may request a copy of these filings, at no cost, by writing or telephoning us at the following address:
Network
Engines, Inc.
25 Dan Road
Canton, Massachusetts 02021
Attn: Investor Relations
(781) 332-1000
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FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference in this prospectus include "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These
statements are based on current expectations, estimates, forecasts and projections about the industry in which we operate and the beliefs and assumptions of our management. Words such as "expects,"
"anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," and "may" and variations of such words and similar expressions are intended to
identify such forward-looking statements. All statements other than statements of historical information are forward-looking statements and may contain projections related to financial results,
economic conditions, trends and known uncertainties. You are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are
referenced in the section of any accompanying prospectus supplement entitled "Risk Factors." You should also carefully review the risk factors and cautionary statements described in the other
documents we file from time to time with the SEC, specifically our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current
Reports on Form 8-K. We undertake no obligation to revise or update any forward-looking statements, except to the extent required by law.
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NETWORK ENGINES, INC.
We are a leading provider of application platforms, appliances and lifecycle support services for software developers, original
equipment manufacturers, or OEMs, and service providers worldwide. Through our comprehensive suite of services that include solution design, integration control, support and other value-added service
capabilities, we enable customers to more effectively deploy, manage, service and support their solutions. Founded in 1997, we are headquartered in Canton, Massachusetts and trade on the Nasdaq Global
Market under the symbol "NENG."
Our
principal executive offices are located at 25 Dan Road, Canton, Massachusetts 02021, and our telephone number is (781) 332-1000.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated. You should read this table in
conjunction with the consolidated financial statements and notes incorporated by reference in this prospectus.
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Three Months
Ended
December 31,
2009
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Fiscal Year
Ended
September 30,
2009
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Fiscal Year
Ended
September 30,
2008
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Fiscal Year
Ended
September 30,
2007
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Fiscal Year
Ended
September 30,
2006
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Fiscal Year
Ended
September 30,
2005
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Consolidated ratios of earnings to fixed charges
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4.54
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N/A
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N/A
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9.22
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N/A
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N/A
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For
purposes of calculating the ratios above, earnings consist of income before provision of income taxes plus fixed charges. Fixed charges include interest expense and the interest portion of rent
expense which is deemed to be representative of the interest factor. The dollar amount of the deficiency in earnings available for fixed charges for a one-to-one ratio for the
fiscal years ended September 30, 2009, 2008, 2006 and 2005 was $3,198, $8,277, $5,399 and $15,583, respectively.
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USE OF PROCEEDS
We intend to use the net proceeds from the sale of any securities offered under this prospectus for general corporate purposes unless
otherwise indicated in the applicable prospectus supplement. General corporate purposes may include working capital and capital expenditures, repayment and refinancing of debt and the acquisition of
companies, businesses or product lines. We may temporarily invest the net proceeds in investment-grade, interest-bearing securities until they are used for their stated purpose. We have not determined
the amount of net proceeds to be used specifically for such purposes. As a result, management will retain broad discretion over the allocation of net proceeds.
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THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize all the
material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular terms of the
securities offered by that prospectus supplement. If we indicate in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below. We will also
include in the prospectus supplement information, where applicable, about material United States federal income tax considerations relating to the securities, and the securities exchange, if any, on
which the securities will be listed.
We
may sell from time to time, in one or more offerings:
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common stock;
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preferred stock;
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debt securities;
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depositary shares;
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purchase contracts;
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purchase units
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warrants; or
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any combination of the foregoing.
In
this prospectus, we refer to the common stock, preferred stock, debt securities, depositary shares, purchase contracts, purchase units and warrants collectively as "securities." The
total dollar amount of all securities that we may sell will not exceed $40,000,000.
If
we issue debt securities at a discount from their original stated principal amount, then, for purposes of calculating the total dollar amount of all securities issued under this
prospectus, we will treat the initial offering price of the debt securities as the total original principal amount of the debt securities.
This
prospectus may not be used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
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DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock is intended as a summary only. This description is based upon, and is qualified by
reference to, our second amended and restated certificate of incorporation, our third amended and restated by-laws and applicable provisions of Delaware corporate law. This summary is not
complete. You should read our second amended and restated certificate of incorporation and third amended and restated by-laws, which are filed as exhibits to the registration statement of
which this prospectus forms a part, for the provisions that are important to you.
Our
capital stock consists of 100,000,000 shares of common stock and 5,000,000 shares of preferred stock. As of April 23, 2010, 42,278,979 shares of common stock were outstanding
and no shares of preferred stock were outstanding.
Common Stock
Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders at meetings of
stockholders and do not have cumulative voting rights. Directors are elected by a plurality of the votes of the shares present in person or by proxy at the meeting and entitled to vote in elections of
directors. Holders of common stock are entitled to receive ratably any dividends that are declared by the board of directors out of funds legally available therefor, subject to any preferential
dividend rights of outstanding preferred stock. Upon the liquidation, dissolution or winding up of Network Engines, Inc., the holders of common stock are entitled to receive ratably our net
assets available after the payment of all our debts and other liabilities, subject to the prior rights of any outstanding preferred stock. Holders of our common stock have no preemptive, subscription,
redemption or conversion rights, nor are they entitled to the benefit of any sinking fund. The rights, powers, preferences and privileges of holders of common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of preferred stock that our board of directors may designate and issue in the future.
Transfer Agent and Registrar
Computershare is the transfer agent and registrar for the common stock.
Delaware Law and Certain Charter and By-Law Provisions; Anti-Takeover Effects
We are subject to the provisions of Section 203 of the General Corporation Law of Delaware. Section 203 prohibits a
publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the
person became an interested stockholder, unless the business combination is approved in a prescribed manner. A "business combination" includes mergers, asset sales and other transactions resulting in
a financial benefit to the interested stockholder. Subject to certain exceptions, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years did
own, 15% or more of the corporation's voting stock.
Our
third amended and restated by-laws provide for the division of the board of directors into three classes, as nearly equal in size as possible, with staggered
three-year terms. Under our third amended and restated by-laws any vacancy on the board of directors, however occurring, including a vacancy resulting from an enlargement of
the board, may only
be filled by vote of a majority of the directors then in office. The classification of the board of directors and the limitations on the removal of directors and filling of vacancies could have the
effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of Network Engines, Inc.
Our
second amended and restated certificate of incorporation and third amended and restated by-laws also provide that any action required or permitted to be taken by our
stockholders at an annual
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meeting
or special meeting of stockholders may only be taken if it is properly brought before a meeting of stockholders and may not be taken by written action in lieu of a meeting. Our second amended
and restated certificate of incorporation and third amended and restated by-laws further provide that special meetings of the stockholders may only be called by the Chairman of the board
of directors, the Chief Executive Officer, the President, or by the board of directors. Under the third amended and restated by-laws, in order for any matter to be considered "properly
brought" before a meeting, a stockholder must comply with certain requirements regarding advance notice to us. The foregoing provisions could have the effect of delaying until the next stockholders'
meeting stockholder actions which are favored by the holders of a majority of our outstanding voting securities. These provisions may also discourage another person or entity from making a tender
offer for our common stock, because a person or an entity, even if that person or entity acquired a majority of our outstanding voting securities, would be able to take action as a stockholder
(e.g., to elect new directors or approve a merger) only at a duly called stockholders meeting, and not by written consent.
The
General Corporation Law of Delaware provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or by-laws, unless a corporation's certificate of incorporation or by-laws, as the case may be, requires a greater percentage. Our third amended
and restated by-laws may be amended or repealed by a majority vote of the board of directors or the holders of a majority of the shares of our capital stock issued and outstanding and
entitled to vote, subject to any limitations set forth in the restated by-laws. The stockholder vote would be in addition to any separate class vote that might in the future be required
pursuant to the terms of any series of preferred stock that might be outstanding at the time any amendments are submitted to stockholders for approval.
Limitation of Liability and Indemnification
Our second amended and restated certificate of incorporation provides that our directors and officers shall be indemnified by us to the
fullest extent authorized by Delaware law, as it now exists or may in the future be amended, against all expenses and liabilities reasonably incurred in connection with the service for or on our
behalf. In addition, our second amended and
restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, unless they violated their
duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from
their action as directors.
Preferred Stock
Our board of directors are authorized, subject to any limitations prescribed by law, without further stockholder approval, to issue
from time to time up to an aggregate of 5,000,000 shares of preferred stock, in one or more series. Each series of preferred stock that may be authorized shall have the number of shares, designations,
preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our board of directors, which may include, among others, dividend rights, voting
rights, redemption provisions, liquidation preferences, conversion rights and preemptive rights.
Our
stockholders have granted the board of directors authority to issue the preferred stock and to determine its rights and preferences in order to eliminate delays associated with a
stockholder vote on specific issuances. The rights of the holders of common stock will be subject to the rights of holders of any preferred stock issued in the future. The issuance of preferred stock,
while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could adversely affect the voting power or other rights of the holders of common stock, and
could make it more difficult for a third party to acquire, or discourage a third party from attempting to acquire, a majority of our outstanding voting stock.
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The
preferred stock has the terms described below unless otherwise provided in the prospectus supplement relating to a particular series of preferred stock. You should read the
prospectus supplement relating to the particular series of preferred stock being offered for specific terms, including:
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the designation and stated value per share of the preferred stock and the number of shares offered;
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the amount of liquidation preference per share;
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the price at which the preferred stock will be issued;
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the dividend rate, or method of calculation of dividends, the dates on which dividends will be payable, whether dividends
will be cumulative or noncumulative and, if cumulative, the dates from which dividends will commence to accumulate;
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any redemption or sinking fund provisions;
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if other than the currency of the United States, the currency or currencies including composite currencies in which the
preferred stock is denominated and/or in which payments will or may be payable;
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any conversion provisions;
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whether we have elected to offer depositary shares as described under "Description of Depositary Shares;" and
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any other rights, preferences, privileges, limitations and restrictions on the preferred stock.
The
preferred stock will, when issued, be fully paid and nonassessable. Unless otherwise specified in the prospectus supplement, each series of preferred stock will rank equally as to
dividends and
liquidation rights in all respects with each other series of preferred stock. The rights of holders of shares of each series of preferred stock will be subordinate to those of our general creditors.
As
described under "Description of Depositary Shares," we may, at our option, with respect to any series of preferred stock, elect to offer fractional interests in shares of preferred
stock, and provide for the issuance of depositary receipts representing depositary shares, each of which will represent a fractional interest in a share of the series of preferred stock. The
fractional interest will be specified in the prospectus supplement relating to a particular series of preferred stock.
Rank
Unless otherwise specified in the prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon our
liquidation, dissolution or winding up of its affairs, rank:
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senior to our common stock and to all equity securities ranking junior to such preferred stock with respect to dividend
rights or rights upon our liquidation, dissolution or winding up of our affairs;
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on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities
rank on a parity with the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs; and
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junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank
senior to the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs.
The
term "equity securities" does not include convertible debt securities.
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Dividends
Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors, cash
dividends at such rates and on such dates described in the prospectus supplement. Different series of preferred stock may be entitled to dividends at different rates or based on different methods of
calculation. The dividend rate may be fixed or variable or both. Dividends will be payable to the holders of record as they appear on our stock books on record dates fixed by our board of directors,
as specified in the applicable prospectus supplement.
Dividends
on any series of preferred stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does not declare a dividend
payable on a dividend payment date on any series of noncumulative preferred stock, then the holders of that noncumulative preferred stock will have no right to receive a dividend for that dividend
payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends on that series are declared payable on any future dividend payment dates. Dividends
on any series of cumulative preferred stock will accrue from the date we initially issue shares of such series or such other date specified in the applicable prospectus supplement.
No
dividends may be declared or paid or funds set apart for the payment of any dividends on any parity securities unless full dividends have been paid or set apart for payment on the
preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the parity securities.
No
dividends may be declared or paid or funds set apart for the payment of dividends on any junior securities unless full dividends for all dividend periods terminating on or prior to
the date of the declaration or payment will have been paid or declared and a sum sufficient for the payment set apart for payment on the preferred stock.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before we make any distribution or
payment to the holders of any common stock or any other class or series of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation, dissolution or
winding up of our affairs, the holders of each series of preferred stock shall be entitled to receive out of assets legally available for distribution to stockholders, liquidating distributions in the
amount of the liquidation preference per share set forth in the prospectus supplement, plus any accrued and unpaid dividends thereon. Such dividends will not include any accumulation in respect of
unpaid noncumulative dividends for prior dividend periods. Unless otherwise specified in the prospectus supplement, after payment of the full amount of their liquidating distributions, the holders of
preferred stock will have no right or claim to any of our remaining assets. Upon any such voluntary or involuntary liquidation, dissolution or winding up, if our available assets are insufficient to
pay the amount of the liquidating distributions on all outstanding preferred stock and the corresponding amounts payable on all other classes or series of our capital stock ranking on parity with the
preferred stock and all other such classes or series of shares of capital stock ranking on parity with the preferred stock in the distribution of assets, then the holders of the preferred stock and
all other such classes or series of capital stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be entitled.
Upon
any such liquidation, dissolution or winding up and if we have made liquidating distributions in full to all holders of preferred stock, we will distribute our remaining assets
among the holders of any other classes or series of capital stock ranking junior to the preferred stock according to their respective rights and preferences and, in each case, according to their
respective number of shares. For such purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our
property or assets will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.
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Redemption
If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at
our option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.
The
prospectus supplement relating to a series of preferred stock that is subject to mandatory redemption will specify the number of shares of preferred stock that shall be redeemed by
us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accrued and unpaid dividends thereon to the date of
redemption. Unless the shares have a cumulative dividend, such accrued dividends will not include any accumulation in respect of unpaid dividends for prior dividend periods. We may pay the redemption
price in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance
of shares of our capital stock, the terms of such preferred stock may provide that, if no such shares of our capital stock shall have been issued or to the extent the net proceeds from any issuance
are insufficient to pay in full the aggregate redemption price then due, such preferred stock shall automatically and mandatorily be converted into the applicable shares of our capital stock pursuant
to conversion provisions specified in the applicable prospectus supplement. Notwithstanding the foregoing, we will not redeem any preferred stock of a series unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and
pay or set aside funds to pay full cumulative dividends on the preferred stock for all past dividend periods and the then current dividend period; or
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if such series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously
declare and pay or set aside funds to pay full dividends for the then current dividend period.
In
addition, we will not acquire any preferred stock of a series unless:
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if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and
pay or set aside funds to pay full cumulative dividends on all outstanding shares of such series of preferred stock for all past dividend periods and the then current dividend period; or
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if that series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously
declare and pay or set aside funds to pay full dividends on the preferred stock of such series for the then current dividend period.
However,
at any time we may purchase or acquire preferred stock of that series (1) pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding
preferred stock of such series or (2) by conversion into or exchange for shares of our capital stock ranking junior to the preferred stock of such series as to dividends and upon liquidation.
If
fewer than all of the outstanding shares of preferred stock of any series are to be redeemed, we will determine the number of shares that may be redeemed pro rata from the holders of
record of such shares in proportion to the number of such shares held or for which redemption is requested by such holder or by any other equitable manner that we determine. Such determination will
reflect adjustments to avoid redemption of fractional shares.
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Unless
otherwise specified in the prospectus supplement, we will mail notice of redemption at least 30 days but not more than 60 days before the redemption date to each
holder of record of preferred stock to be redeemed at the address shown on our stock transfer books. Each notice shall state:
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the redemption date;
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the number of shares and series of preferred stock to be redeemed;
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the redemption price;
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the place or places where certificates for such preferred stock are to be surrendered for payment of the redemption price;
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that dividends on the shares to be redeemed will cease to accrue on such redemption date;
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the date upon which the holder's conversion rights, if any, as to such shares shall terminate; and
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the specific number of shares to be redeemed from each such holder if fewer than all the shares of any series are to be
redeemed.
If
notice of redemption has been given and we have set aside the funds necessary for such redemption in trust for the benefit of the holders of any shares called for redemption, then
from and after the redemption date, dividends will cease to accrue on such shares, and all rights of the holders of such shares will terminate, except the right to receive the redemption price.
Voting Rights
Holders of preferred stock will not have any voting rights, except as required by law or as indicated in the applicable prospectus
supplement.
Unless
otherwise provided for under the terms of any series of preferred stock, no consent or vote of the holders of shares of preferred stock or any series thereof shall be required for
any amendment to our second amended and restated certificate of incorporation that would increase the number of authorized shares of preferred stock or the number of authorized shares of any series
thereof or decrease the number of authorized shares of preferred stock or the number of authorized shares of any series thereof (but not below the number of authorized shares of preferred stock or
such series, as the case may be, then outstanding).
Conversion Rights
The terms and conditions, if any, upon which any series of preferred stock is convertible into our common stock will be set forth in
the applicable prospectus supplement relating
thereto. Such terms will include the number of shares of common stock into which the shares of preferred stock are convertible, the conversion price, rate or manner of calculation thereof, the
conversion period, provisions as to whether conversion will be at our option or at the option of the holders of the preferred stock, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption.
Transfer Agent and Registrar
The transfer agent and registrar for the preferred stock will be set forth in the applicable prospectus supplement.
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DESCRIPTION OF DEBT SECURITIES
We may offer debt securities which may be senior or subordinated. We refer to the senior debt securities and the subordinated debt
securities collectively as debt securities. The following description summarizes the general terms and provisions of the debt securities. We will describe the specific terms of the debt securities and
the extent, if any, to which the general provisions summarized below apply to any series of debt securities in the prospectus supplement relating to the series and any applicable free writing
prospectus that we authorize to be delivered. When we refer to "the Company," "we," "our," and "us" in this section, we mean Network Engines, Inc. excluding, unless the context otherwise
requires or as otherwise expressly stated, our subsidiaries.
We
may issue senior debt securities from time to time, in one or more series under a senior indenture to be entered into between us and a senior trustee to be named in a prospectus
supplement, which we refer to as the senior trustee. We may issue subordinated debt securities from time to time, in one or more series under a subordinated indenture to be entered into between us and
a subordinated trustee to be named in a prospectus supplement, which we refer to as the subordinated trustee. The forms of senior indenture and subordinated indenture are filed as exhibits to this
registration statement. Together, the senior indenture and the subordinated indenture are referred to as the indentures and, together, the senior trustee and the subordinated trustee are referred to
as the trustees. This
prospectus briefly outlines some of the provisions of the indentures. The following summary of the material provisions of the indentures is qualified in its entirety by the provisions of the
indentures, including definitions of certain terms used in the indentures. Wherever we refer to particular sections or defined terms of the indentures, those sections or defined terms are incorporated
by reference in this prospectus or the applicable prospectus supplement. You should review the indentures that are filed as exhibits to the registration statement of which this prospectus
forms a part for additional information.
None
of the indentures will limit the amount of debt securities that we may issue. The applicable indenture will provide that debt securities may be issued up to an aggregate principal
amount authorized from time to time by us and may be payable in any currency or currency unit designated by us or in amounts determined by reference to an index.
General
The senior debt securities will constitute our unsecured and unsubordinated general obligations and will rank pari passu with our other
unsecured and unsubordinated obligations. The subordinated debt securities will constitute our unsecured and subordinated general obligations and will be junior in right of payment to our senior
indebtedness (including senior debt securities), as described under the heading "Certain Terms of the Subordinated Debt SecuritiesSubordination."
The
debt securities will be our unsecured obligations. Any secured debt or other secured obligations will be effectively senior to the debt securities to the extent of the value of the
assets securing such debt or other obligations.
The
applicable prospectus supplement and/or free writing prospectus will include any additional or different terms of the debt securities being offered, including the following
terms:
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the title and type of the debt securities;
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whether the debt securities will be senior or subordinated debt securities, and, with respect to debt securities issued
under the subordinated indenture the terms on which they are subordinated;
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the aggregate principal amount of the debt securities;
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the price or prices at which we will sell the debt securities;
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the maturity date or dates of the debt securities and the right, if any, to extend such date or dates;
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the rate or rates, if any, per year, at which the debt securities will bear interest, or the method of determining such
rate or rates;
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the date or dates from which such interest will accrue, the interest payment dates on which such interest will be payable
or the manner of determination of such interest payment dates and the related record dates;
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the right, if any, to extend the interest payment periods and the duration of that extension;
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the manner of paying principal and interest and the place or places where principal and interest will be payable;
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provisions for a sinking fund, purchase fund or other analogous fund, if any;
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any redemption dates, prices, obligations and restrictions on the debt securities;
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the currency, currencies or currency units in which the debt securities will be denominated and the currency, currencies
or currency units in which principal and interest, if any, on the debt securities may be payable;
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any conversion or exchange features of the debt securities;
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whether and upon what terms the debt securities may be defeased;
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any events of default or covenants in addition to or in lieu of those set forth in the indenture;
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whether the debt securities will be issued in definitive or global form or in definitive form only upon satisfaction of
certain conditions;
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whether the series of debt securities will be guaranteed as to payment or performance;
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any special tax implications of the debt securities; and
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any other material terms of the debt securities.
We
may from time to time, without notice to or the consent of the holders of any series of debt securities, create and issue further debt securities of any such series ranking equally
with the debt securities of such series in all respects (or in all respects other than (1) the payment of interest accruing prior to the issue date of such further debt securities or
(2) the first payment of interest following the issue date of such further debt securities). Such further debt securities may be consolidated and form a single series with the debt
securities of such series and have the same terms as to status, redemption or otherwise as the debt securities of such series.
You
may present debt securities for exchange and you may present debt securities for transfer in the manner, at the places and subject to the restrictions set forth in the debt
securities and the applicable prospectus supplement. We will provide you those services without charge, although you may have to pay any tax or other governmental charge payable in connection with any
exchange or transfer, as set forth in the indenture.
Debt
securities will bear interest at a fixed rate or a floating rate. Debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing
market rate (original issue discount securities) may be sold at a discount below their stated principal amount. U.S. federal income tax considerations applicable to any such discounted debt securities
or to certain debt securities issued at par which are treated as having been issued at a discount for U.S. federal income tax purposes will be described in the applicable prospectus supplement.
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We
may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on any interest payment date, to be determined by
reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices. You may receive a payment of principal on any principal payment date, or a payment
of interest on any interest payment date, that is greater than or less than the amount of principal or interest otherwise payable on such dates, depending on the value on such dates of the applicable
currency, security or basket of securities, commodity or index. Information as to the methods for determining the amount of principal or interest payable on any date, the currencies, securities or
baskets of securities, commodities or indices to which the amount payable on such date is linked and certain related tax considerations will be set forth in the applicable prospectus supplement.
Certain Terms of the Senior Debt Securities
Covenants.
Unless we indicate otherwise in a prospectus supplement, the senior debt securities will not contain any financial or
restrictive
covenants, including covenants restricting either us or any of our subsidiaries from incurring, issuing, assuming or guaranteeing any indebtedness secured by a lien on any of our or our subsidiaries'
property or capital stock, or restricting either us or any of our subsidiaries from entering into sale and leaseback transactions.
Consolidation, Merger and Sale of Assets.
Unless we indicate otherwise in a prospectus supplement, we may not consolidate with or merge
into any
other person, in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to any person, in either case,
unless:
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the successor entity, if any, is a U.S. corporation, limited liability company, partnership or trust (subject to certain
exceptions provided for in the senior indenture);
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the successor entity assumes our obligations on the senior debt securities and under the senior indenture;
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immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing;
and
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certain other conditions are met.
No Protection in the Event of a Change in Control.
Unless we indicate otherwise in a prospectus supplement with respect to a particular
series of
senior debt securities, the senior debt securities will not contain any provisions that may afford holders of the senior debt securities protection in the event we have a change in control or in the
event of a highly leveraged transaction (whether or not such transaction results in a change in control).
Events of Default.
The following are events of default under the senior indenture for any series of senior debt
securities:
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failure to pay principal or premium on the senior debt securities of such series when due and payable whether at maturity,
upon redemption, by declaration or otherwise;
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failure to pay interest on any senior debt securities of such series when due and payable, if that default continues for a
period of 30 days (or such other period as may be specified for such series);
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default in the performance of or breach of any of our covenants or agreements in the senior indenture applicable to senior
debt securities of such series, other than a covenant breach which is specifically dealt with elsewhere in the senior indenture, and that default or breach continues for a period of 60 days
after we receive written notice from the trustee or from the holders of 25% or more in aggregate principal amount of the senior debt securities of such series;
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certain events of bankruptcy or insolvency, whether voluntary or not; and
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any other event of default provided for in such series of senior debt securities as may be specified in the applicable
prospectus supplement.
The
default by us under any other debt, including any other series of debt securities, is not a default under the senior indenture.
If
an event of default other than an event of default specified in the fourth bullet point above occurs with respect to a series of senior debt securities and is continuing under the
senior indenture, then, and in each such case, either the trustee or the holders of not less than 25% in aggregate principal amount of such series then outstanding under the senior indenture (each
such series voting as a separate class) by written notice to us and to the trustee, if such notice is given by the holders, may, and the trustee at the request of such holders shall, declare the
principal amount of and accrued interest, if any, on such series of senior debt securities to be immediately due and payable.
If
an event of default specified in the fourth bullet point above occurs and is continuing, the entire principal amount of, and accrued interest, if any, on each series of senior debt
securities then outstanding shall become immediately due and payable.
Upon
a declaration of acceleration, the principal amount of and accrued interest, if any, on such senior debt securities shall be immediately due and payable. Unless otherwise specified
in the prospectus supplement relating to a series of senior debt securities originally issued at a discount, the amount due upon acceleration shall include only the original issue price of the senior
debt securities, the amount of original issue discount accrued to the date of acceleration and accrued interest, if any.
Upon
certain conditions, declarations of acceleration may be rescinded and annulled and past defaults may be waived by the holders of a majority in aggregate principal amount of all the
senior debt securities of such series affected by the default, each series voting as a separate class. Furthermore, subject to various provisions in the senior indenture, the holders of a majority in
aggregate principal amount of a series of senior debt securities, by notice to the trustee, may waive an existing default or event of default with respect to such senior debt securities and its
consequences, except a default in the payment of principal of or interest on such senior debt securities or in respect of a covenant or provision of the senior indenture which cannot be modified or
amended without the consent of the holders of each such senior debt security. Upon any such waiver, such default shall cease to exist, and any event of default with respect to such senior debt
securities shall be deemed to have been cured, for every purpose of the senior indenture; but no such waiver shall extend to any subsequent or other default or event of default or impair any right
consequent thereto. For information as to the waiver of defaults, see "Modification and Waiver."
The
holders of a majority in aggregate principal amount of a series of senior debt securities may 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 such senior debt securities. However, the trustee may refuse to follow any direction that conflicts with law or
the senior indenture that may involve the trustee in personal liability or that the trustee determines in good faith may be unduly prejudicial to the rights of holders of such series of senior debt
securities not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from holders of such series of senior
debt securities. A holder may not pursue any remedy with respect to the senior indenture or any series of senior debt securities unless:
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the holder gives the trustee written notice of a continuing event of default;
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the holders of at least 25% in aggregate principal amount of such series of senior debt securities make a written request
to the trustee to pursue the remedy in respect of such event of default;
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the requesting holder or holders offer the trustee indemnity satisfactory to the trustee against any costs, liability or
expense;
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the trustee does not comply with the request within 60 days after receipt of the request and the offer of
indemnity; and
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during such 60-day period, the holders of a majority in aggregate principal amount of such series of senior
debt securities do not give the trustee a direction that is inconsistent with the request.
These
limitations, however, do not apply to the right of any holder of a senior debt security to receive payment of the principal of or interest, if any, on such senior debt security, or
to bring suit for the enforcement of any such payment, on or after the due date for the senior debt securities, which right shall not be impaired or affected without the consent of the holder.
The
senior indenture requires certain of our officers to certify, on or before a fixed date in each year in which any senior debt security is outstanding, as to their knowledge of our
compliance with all conditions and covenants under the senior indenture.
Satisfaction and Discharge.
We can satisfy and discharge our obligations to holders of any series of debt securities if:
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we pay or cause to be paid, as and when due and payable, the principal of and any interest on all senior debt securities
of such series outstanding under the senior indenture; or
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all senior debt securities of such series have become due and payable or will become due and payable within one year (or
are to be called for redemption within one year) and we deposit in trust a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make
interest, principal, any premium and any other payments on the debt securities of that series on their various due dates.
Under
current U.S. federal tax law, the deposit and our legal release from the debt securities would be treated as though we took back your debt securities and gave you your share of the
cash and debt securities or bonds deposited in trust. In that event, you could recognize gain or loss on the debt securities you give back to us. Purchasers of the debt securities should consult their
own advisers with respect to the tax consequences to them of such deposit and discharge, including the applicability and effect of tax laws other than the U.S. income tax law.
Defeasance.
Unless the applicable prospectus supplement provides otherwise, the following discussion of legal defeasance and discharge
and covenant
defeasance will apply to any series of debt securities issued under the indentures.
Legal Defeasance.
We can legally release ourselves from any payment or other obligations on the debt securities of any series
(called "legal defeasance") if the following conditions are met:
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We deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same
series a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal, any premium and any other payments on the
debt securities of that series on their various due dates.
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There is a change in current U.S. federal tax law or an IRS ruling that lets us make the above deposit without causing you
to be taxed on the debt securities any differently than if we did not make the deposit and instead repaid the debt securities ourselves when due. Under current U.S. federal tax law, the deposit and
our legal release from the debt securities would be treated as though we took back your debt securities and gave you your share of the cash and debt securities or bonds deposited in trust. In that
event, you could recognize gain or loss on the debt securities you give back to us.
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We deliver to the trustee a legal opinion of our counsel confirming the tax law change or ruling described above.
If
we ever did accomplish legal defeasance, as described above, you would have to rely solely on the trust deposit for repayment of the debt securities. You could not look to us for
repayment in the event of any shortfall.
Covenant Defeasance.
Without any change of current U.S. federal tax law, we can make the same type of deposit described above
and be released from some of the covenants in the debt securities (called "covenant defeasance"). In that event, you would lose the protection of those covenants but would gain the protection of
having money and securities set aside in trust to repay the debt securities. In order to achieve covenant defeasance, we must do the following:
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We must deposit in trust for your benefit and the benefit of all other direct holders of the debt securities of the same
series a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal, any premium and any other payments on the
debt securities of that series on their various due dates.
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We must deliver to the trustee a legal opinion of our counsel confirming that under current U.S. federal income tax law we
may make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and instead repaid the debt securities ourselves when due.
If
we accomplish covenant defeasance, you can still look to us for repayment of the debt securities if there were a shortfall in the trust deposit. In fact, if one of the Events of
Default occurred (such as our bankruptcy) and the debt securities become immediately due and payable, there may be such a shortfall. Depending on the events causing the default, you may not be able to
obtain payment of the shortfall.
Modification and Waiver.
We and the trustee may amend or supplement the senior indenture or the senior debt securities without the
consent of any
holder:
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to convey, transfer, assign, mortgage or pledge any assets as security for the senior debt securities of one or more
series;
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to evidence the succession of another corporation, and the assumption by such successor corporation of our covenants,
agreements and obligations under the senior indenture;
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to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and
to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default;
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to cure any ambiguity, defect or inconsistency in the senior indenture or in any supplemental indenture or to conform the
senior indenture or the senior debt securities to the description of senior debt securities of such series set forth in this prospectus or any applicable prospectus supplement;
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to provide for or add guarantors with respect to the senior debt securities of any series;
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to establish the form or forms or terms of the senior debt securities as permitted by the senior indenture;
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to evidence and provide for the acceptance of appointment hereunder by a successor trustee, or to make such changes as
shall be necessary to provide for or facilitate the administration of the trusts in the senior indenture by more than one trustee;
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to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms, purposes of
issue, authentication and delivery of any series of senior debt securities;
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to make any change to the senior debt securities of any series so long as no senior debt securities of such series are
outstanding; or
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to make any change that does not adversely affect the rights of any holder in any material respect.
Other
amendments and modifications of the senior indenture or the senior debt securities issued may be made, and our compliance with any provision of the senior indenture with respect to
any series of senior debt securities may be waived, with the consent of the holders of a majority of the aggregate principal amount of the outstanding senior debt securities of all series affected by
the amendment or modification (voting together as a single class); provided, however, that each affected holder must consent to any modification, amendment or waiver that:
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extends the final maturity of any senior debt securities of such series;
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reduces the principal amount of, or premium, if any, on any senior debt securities of such series;
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reduces the rate or extends the time of payment of interest on any senior debt securities of such series;
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reduces the amount payable upon the redemption of any senior debt securities of such series;
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changes the currency of payment of principal of, or premium, if any, or interest on, any senior debt securities of such
series;
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reduces the principal amount of original issue discount securities payable upon acceleration of maturity or the amount
provable in bankruptcy;
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waives a default in the payment of principal of or interest on the senior debt securities;
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changes the provisions relating to the waiver of past defaults or changes or impairs the right of holders to receive
payment or to institute suit for the enforcement of any payment or conversion of any senior debt securities of such series on or after the due date therefor;
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modifies any of the provisions for these restrictions, except to increase any required percentage or to provide that
certain other provisions cannot be modified or waived without the consent of the holder of each senior debt security of such series affected by the modification; or
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reduces the above-stated percentage of outstanding senior debt securities of such series whose holders must consent to a
supplemental indenture or to modify or amend or to waive certain provisions of or defaults under the senior indenture.
It
shall not be necessary for the holders to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if the holders' consent approves the
substance thereof. After an amendment, supplement or waiver of the senior indenture in accordance with the provisions described in this section becomes effective, the trustee must give to the holders
affected thereby certain notice briefly describing the amendment, supplement or waiver. Any failure by the trustee to give such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.
No Personal Liability of Incorporators, Stockholders, Officers, Directors.
The senior indenture provides that no recourse shall be had
under any
obligation, covenant or agreement of ours in the senior indenture or any supplemental indenture, or in any of the senior debt securities or because of the creation of any indebtedness represented
thereby, against any of our incorporators, stockholders,
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officers
or directors, past, present or future, or of any predecessor or successor entity thereof under any law, statute or constitutional provision or by the enforcement of any assessment or by any
legal or equitable proceeding or otherwise. Each holder, by accepting the senior debt securities, waives and releases all such liability.
Concerning the Trustee.
The senior indenture provides that, except during the continuance of a default, the trustee will not be liable
except for the
performance of such duties as are specifically set forth in the senior indenture. If an event of default has occurred and is continuing, the trustee will exercise such rights and powers vested in it
under the senior indenture and will use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs.
The
senior indenture and the provisions of the Trust Indenture Act of 1939 incorporated by reference therein contain limitations on the rights of the trustee thereunder, should it become
a creditor of ours or any of our subsidiaries, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise.
The trustee is permitted to engage in other transactions, provided that if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate such conflict or resign.
We
may have normal banking relationships with the trustee under the senior indenture in the ordinary course of business.
Unclaimed Funds.
All funds deposited with the trustee or any paying agent for the payment of principal, interest, premium or additional
amounts in
respect of the senior debt securities that remain unclaimed for two years after the maturity date of such senior debt securities will be repaid to us. Thereafter, any right of any holder of senior
debt securities to such funds shall be enforceable only against us, and the trustee and paying agents will have no liability therefor.
Governing Law.
The senior indenture and the senior debt securities will be governed by, and construed in accordance with, the internal
laws of the
State of New York.
Certain Terms of the Subordinated Debt Securities
Other than the terms of the subordinated indenture and subordinated debt securities relating to subordination or otherwise as described
in the prospectus supplement relating to a particular series of subordinated debt securities, the terms of the subordinated indenture and subordinated debt securities are identical in all material
respects to the terms of the senior indenture and senior debt securities.
Additional
or different subordination terms may be specified in the prospectus supplement applicable to a particular series.
Subordination.
The indebtedness evidenced by the subordinated debt securities is subordinate to the prior payment in full of all of our
senior
indebtedness, as defined in the subordinated indenture. During the continuance beyond any applicable grace period of any default in the payment of principal, premium, interest or any other payment due
on any of our senior indebtedness, we may not make any payment of principal of, or premium, if any, or interest on the subordinated debt securities. In addition, upon any payment or distribution of
our assets upon any dissolution, winding up, liquidation or reorganization, the payment of the principal of, or premium, if any, and interest on the subordinated debt securities will be subordinated
to the extent provided in the subordinated indenture in right of payment to the prior payment in full of all our senior indebtedness. Because of this subordination, if we dissolve or otherwise
liquidate, holders of our subordinated debt securities may receive less, ratably, than holders of our senior indebtedness. The subordination provisions do not prevent the occurrence of an event of
default under the subordinated indenture.
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The
term "senior indebtedness" of a person means with respect to such person the principal of, premium, if any, interest on, and any other payment due pursuant to any of the following,
whether outstanding on the date of the subordinated indenture or incurred by that person in the future:
-
-
all of the indebtedness of that person for money borrowed;
-
-
all of the indebtedness of that person evidenced by notes, debentures, bonds or other securities sold by that person for
money;
-
-
all of the lease obligations which are capitalized on the books of that person in accordance with generally accepted
accounting principles;
-
-
all indebtedness of others of the kinds described in the first two bullet points above and all lease obligations of others
of the kind described in the third bullet point above that the person, in any manner, assumes or guarantees or that the person in effect guarantees through an agreement to purchase, whether that
agreement is contingent or otherwise; and
-
-
all renewals, extensions or refundings of indebtedness of the kinds described in the first, second or fourth bullet point
above and all renewals or extensions of leases of the kinds described in the third or fourth bullet point above;
unless,
in the case of any particular indebtedness, renewal, extension or refunding, the instrument creating or evidencing it or the assumption or guarantee relating to it expressly provides that such
indebtedness, renewal, extension or refunding is not superior in right of payment to the subordinated debt securities. Our senior debt securities constitute senior indebtedness for purposes of the
subordinated debt indenture.
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DESCRIPTION OF DEPOSITARY SHARES
General
We may, at our option, elect to offer fractional shares of preferred stock, which we call depositary shares, rather than full shares of
preferred stock. If we do, we will issue to the public receipts, called depositary receipts, for depositary shares, each of which will represent a fraction, to be described in the applicable
prospectus supplement, of a share of a particular series of preferred stock. Unless otherwise provided in the prospectus supplement, each owner of a depositary share will be entitled, in proportion to
the applicable fractional interest in a share of preferred stock represented by the depositary share, to all the rights and preferences of the preferred stock represented by the depositary share.
Those rights include dividend, voting, redemption, conversion and liquidation rights.
The
shares of preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary under a deposit agreement between us,
the depositary and the holders of the depositary receipts. The depositary will be the transfer agent, registrar and dividend disbursing agent for the depositary shares.
The
depositary shares will be evidenced by depositary receipts issued pursuant to the depositary agreement. Holders of depositary receipts agree to be bound by the deposit agreement,
which requires holders to take certain actions such as filing proof of residence and paying certain charges.
The
summary of terms of the depositary shares contained in this prospectus is not complete. You should refer to the form of the deposit agreement, our restated certificate of
incorporation and the certificate of amendment for the applicable series of preferred stock that are, or will be, filed with the SEC.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash distributions, if any, received in respect of the preferred stock
underlying the depositary shares to the record holders of depositary shares in proportion to the numbers of depositary shares owned by those holders on the relevant record date. The relevant record
date for depositary shares will be the same date as the record date for the underlying preferred stock.
If
there is a distribution other than in cash, the depositary will distribute property (including securities) received by it to the record holders of depositary shares, unless the
depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our approval, adopt another method for the distribution, including selling the property
and distributing the net proceeds from the sale to the holders.
Liquidation Preference
If a series of preferred stock underlying the depositary shares has a liquidation preference, in the event of the voluntary or
involuntary liquidation, dissolution or winding up of us, holders of depositary shares will be entitled to receive the fraction of the liquidation preference accorded each share of the applicable
series of preferred stock, as set forth in the applicable prospectus supplement.
Withdrawal of Stock
Unless the related depositary shares have been previously called for redemption, upon surrender of the depositary receipts at the
office of the depositary, the holder of the depositary shares will be entitled to delivery, at the office of the depositary to or upon his or her order, of the number of whole shares of the preferred
stock and any money or other property represented by the depositary shares. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the
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number
of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to the holder at the same time a new depositary receipt evidencing
the excess number of depositary shares. In no event will the depositary deliver fractional shares of preferred stock upon surrender of depositary receipts. Holders of preferred stock thus withdrawn
may not thereafter deposit those shares under the deposit agreement or receive depositary receipts evidencing depositary shares therefor.
Redemption of Depositary Shares
Whenever we redeem shares of preferred stock held by the depositary, the depositary will redeem as of the same redemption date the
number of depositary shares representing shares of the preferred stock so redeemed, so long as we have paid in full to the depositary the redemption price of the preferred stock to be redeemed plus an
amount equal to any accumulated and unpaid dividends on the preferred stock to the date fixed for redemption. The redemption price per depositary share will be equal to the redemption price and any
other amounts per share payable on the preferred stock multiplied by the fraction of a share of preferred stock represented by one depositary share. If less than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or pro rata or by any other equitable method as may be determined by the depositary.
After
the date fixed for redemption, depositary shares called for redemption will no longer be deemed to be outstanding and all rights of the holders of depositary shares will cease,
except the right to receive the monies payable upon redemption and any money or other property to which the holders of the depositary shares were entitled upon redemption upon surrender to the
depositary of the depositary receipts evidencing the depositary shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred stock are entitled to vote, the depositary will mail the
information contained in the notice of meeting to the record holders of the depositary receipts relating to that preferred stock. The record date for the depositary receipts relating to the preferred
stock will be the same date as the record date for the preferred stock. Each record holder of the depositary shares on the record date will be entitled to instruct the depositary as to the exercise of
the voting rights pertaining to the number of shares of preferred stock represented by that holder's depositary shares. The depositary will endeavor, insofar as practicable, to vote the number of
shares of preferred stock represented by the depositary shares in accordance with those instructions, and we will agree to take all action that may be deemed necessary by the depositary in order to
enable the depositary to do so. The depositary will not vote any shares of preferred stock except to the extent it receives specific instructions from the holders of depositary shares representing
that number of shares of preferred stock.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We
will pay charges of the depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary receipts will pay transfer, income and
other taxes and governmental charges and such other charges (including those in connection with the receipt and distribution of dividends, the sale or exercise of rights, the withdrawal of the
preferred stock and the transferring, splitting or grouping of depositary receipts) as are expressly provided in the deposit agreement to be for their accounts. If these charges have not been paid by
the holders of depositary receipts, the depositary may refuse to transfer depositary shares, withhold dividends and distributions and sell the depositary shares evidenced by the depositary receipt.
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Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement
between us and the depositary. However, any amendment that materially and adversely alters the rights of the holders of depositary shares, other than fee changes, will not be effective unless the
amendment has been approved by the holders of a majority of the outstanding depositary shares. The deposit agreement may be terminated by the depositary or us only if:
-
-
all outstanding depositary shares have been redeemed; or
-
-
there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has
been made to all the holders of depositary shares.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering to us notice of its election to do so, and we may remove the depositary at any
time. Any resignation or removal of the depositary will take effect upon our appointment of a successor depositary and its acceptance of such appointment. The successor depositary must be appointed
within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and having the requisite combined
capital and surplus as set forth in the applicable agreement.
Notices
The depositary will forward to holders of depositary receipts all notices, reports and other communications, including proxy
solicitation materials received from us, that are delivered to the depositary and that we are required to furnish to the holders of the preferred stock. In addition, the depositary will make available
for inspection by holders of depositary receipts at the
principal office of the depositary, and at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary as the holder of preferred stock.
Limitation of Liability
Neither we nor the depositary will be liable if either is prevented or delayed by law or any circumstance beyond its control in
performing its obligations. Our obligations and those of the depositary will be limited to performance in good faith of our and their duties thereunder. We and the depositary will not be obligated to
prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of
counsel or accountants, on information provided by persons presenting preferred stock for deposit, holders of depositary receipts or other persons believed to be competent to give such information and
on documents believed to be genuine and to have been signed or presented by the proper party or parties.
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DESCRIPTION OF PURCHASE CONTRACTS AND PURCHASE UNITS
We may issue purchase contracts, including contracts obligating holders to purchase from or sell to us, and obligating us to sell to or
purchase from the holders, a specified number of shares of our common stock, preferred stock or depositary shares at a future date or dates, which we refer to in this prospectus as purchase contracts.
The price per share of common stock, preferred stock or depositary shares and the number of shares of each may be fixed at the time the purchase contracts are issued or may be determined by reference
to a specific formula set forth in the purchase contracts. The purchase contracts may be issued separately or as part of units, often known as purchase units, consisting of one or more purchase
contracts and beneficial interests in:
-
-
debt securities,
-
-
debt obligations of third parties, including U.S. treasury securities, or
-
-
any other securities described in the applicable prospectus supplement or any combination of the foregoing, securing the
holders' obligations to purchase the common stock, preferred stock or depositary shares under the purchase contracts.
The
purchase contracts may require us to make periodic payments to the holders of the purchase units or vice versa, and these payments may be unsecured or prefunded on some basis. The
purchase contracts may require holders to secure their obligations under those contracts in a specified manner, including pledging their interest in another purchase contract.
The
applicable prospectus supplement will describe the terms of the purchase contracts and purchase units, including, if applicable, collateral or depositary arrangements.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase common stock, preferred stock, debt securities or depositary shares. We may offer warrants separately
or together with one or more additional warrants, debt securities, preferred stock, depositary shares or common stock, or any combination of those securities in the form of units, as described in the
applicable prospectus supplement. If we issue warrants as part of a unit, the accompanying prospectus supplement will specify whether those warrants may be separated from the other securities in the
unit prior to the expiration date of the warrants. The applicable prospectus supplement will also describe the following terms of any warrants:
-
-
the specific designation and aggregate number of, and the offering price at which we will issue, the warrants;
-
-
the currency or currency units in which the offering price, if any, and the exercise price are payable;
-
-
the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you
may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
-
-
whether the warrants are to be sold separately or with other securities as parts of units;
-
-
whether the warrants will be issued in definitive or global form or in any combination of these forms, although, in any
case, the form of a warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
-
-
any applicable material U.S. federal income tax consequences;
-
-
the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer
agents, registrars or other agents;
-
-
the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any
securities exchange;
-
-
the designation and terms of any equity securities purchasable upon exercise of the warrants;
-
-
the designation, aggregate principal amount, currency and terms of any debt securities that may be purchased upon exercise
of the warrants;
-
-
if applicable, the designation and terms of the common stock, preferred stock, debt securities or depositary shares with
which the warrants are issued and, the number of warrants issued with each security;
-
-
if applicable, the date from and after which any warrants issued as part of a unit and the common stock, preferred stock,
debt securities or depositary shares will be separately transferable;
-
-
the number of shares of preferred stock, the number of depositary shares or the number of shares of common stock
purchasable upon exercise of a warrant and the price at which those shares may be purchased;
-
-
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
-
-
information with respect to book-entry procedures, if any;
-
-
the antidilution provisions of, and other provisions for changes to or adjustment in the exercise price of, the warrants,
if any;
-
-
any redemption or call provisions; and
-
-
any additional terms of the warrants, including terms, procedures and limitations relating to the exchange or exercise of
the warrants.
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FORMS OF SECURITIES
Each debt security, depositary share, purchase contract, purchase unit and warrant will be represented either by a certificate issued
in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities. Unless the applicable prospectus supplement provides otherwise,
certificated securities in definitive form and global securities will be issued in registered form. Definitive securities name you or your nominee as the owner of the security, and in order to
transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying
agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, depositary shares, purchase contracts, purchase units or warrants
represented by these global securities. The depositary maintains a computerized system that will reflect each investor's beneficial ownership of the securities through an account maintained by the
investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Registered Global Securities
We may issue the registered debt securities, depositary shares, purchase contracts, purchase units and warrants in the form of one or
more fully registered global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or
nominee. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the
securities to be represented by registered global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be
transferred except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees.
If
not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered global security will be described in the
prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements.
Ownership
of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold
interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities
will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of ownership interests will be effected only through,
records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some
states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests
in registered global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the securities represented by the registered global security for all purposes under the applicable indenture, purchase contract, warrant agreement or purchase unit agreement. Except as
described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names,
will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture,
depositary share agreement, purchase contract,
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purchase
unit agreement or warrant agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered
global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable
indenture, depositary share agreement, purchase contract, purchase unit agreement or warrant agreement. We understand that under existing industry practices, if we request any action of holders or if
an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the applicable indenture, depositary share
agreement, purchase contract, purchase unit agreement or warrant agreement, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests
to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners
holding through them.
Principal,
premium, if any, and interest payments on debt securities, and any payments to holders with respect to warrants, purchase agreements or purchase units, represented by a
registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global
security. None of us, the trustees, the warrant agents, the unit agents or any other agent of ours, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or
liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any
records relating to those beneficial ownership interests.
We
expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution of
underlying securities or other property to holders on that registered global security, will immediately credit participants' accounts in amounts proportionate to their respective beneficial interests
in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security held
through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers or registered in "street
name," and will be the responsibility of those participants.
If
the depositary for any of the securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the
Securities Exchange Act of 1934, and a successor depositary registered as a clearing agency under the Securities Exchange Act of 1934 is not appointed by us within 90 days, we will issue
securities in definitive form in exchange for the registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered global security
will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the depositary's
instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that had been held by the
depositary.
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PLAN OF DISTRIBUTION
We may sell securities:
-
-
through underwriters;
-
-
through dealers;
-
-
through agents;
-
-
directly to purchasers; or
-
-
through a combination of any of these methods of sale.
In
addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing security holders.
We
may directly solicit offers to purchase securities, or agents may be designated to solicit such offers. We will, in the prospectus supplement relating to such offering, name any agent
that could be viewed as an underwriter under the Securities Act, and describe any commissions that we must pay. Any such agent will be acting on a best efforts basis for the period of its appointment
or, if indicated in the applicable prospectus supplement, on a firm commitment basis. This prospectus may be used in connection with any offering of our securities through any of these methods or
other methods described in the applicable prospectus supplement.
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 and any applicable restrictions.
The
prospectus supplement with respect to the securities of a particular series will describe the terms of the offering of the securities, including the
following:
-
-
the name of the agent or any underwriters;
-
-
the public offering or purchase price;
-
-
any discounts and commissions to be allowed or paid to the agent or underwriters;
-
-
all other items constituting underwriting compensation;
-
-
any discounts and commissions to be allowed or paid to dealers; and
-
-
any exchanges on which the securities will be listed.
If
any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement
with them at the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with
them.
If
a dealer is utilized in the sale of the securities in respect of which the prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then
resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
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If
we offer securities in a subscription rights offering to our existing security holders, we may enter into a standby underwriting agreement with dealers, acting as standby
underwriters. We may pay the standby underwriters a commitment fee for the securities they commit to purchase on a standby basis. If we do not enter into a standby underwriting arrangement, we may
retain a dealer-manager to manage a subscription rights offering for us.
Agents,
underwriters, dealers and other persons may be entitled under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
If
so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the
aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when
authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all
cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
-
-
the purchase by an institution of the securities covered under that contract shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which that institution is subject; and
-
-
if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall
have purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of
delayed delivery contracts.
Certain
agents, underwriters and dealers, and their associates and affiliates may be customers of, have borrowing relationships with, engage in other transactions with, and/or perform
services, including
investment banking services, for us or one or more of our respective affiliates in the ordinary course of business.
In
order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other
securities the prices of which may be used to determine payments on such securities. Specifically, any underwriters may overallot in connection with the offering, creating a short position for their
own accounts. In addition, to cover overallotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities or any such
other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an
underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Any such underwriters are not required to
engage in these activities and may end any of these activities at any time.
Under
Rule 15c6-1 of the Exchange Act, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade
expressly agree otherwise. The applicable prospectus supplement may provide that the original issue date for your securities may be more than three scheduled business days after the trade date for
your securities. Accordingly, in such a case, if you wish to trade securities on any date prior to the third business day before the original issue date for your securities, you will be required, by
virtue of the fact that your securities initially are
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expected
to settle in more than three scheduled business days after the trade date for your securities, to make alternative settlement arrangements to prevent a failed settlement.
The
securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national securities exchange. We can make no
assurance as to the liquidity of or the existence of trading markets for any of the securities.
In
compliance with the guidelines of the Financial Industry Regulatory Authority, or FINRA, the aggregate maximum discount, commission or agency fees or other items constituting
underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the proceeds from any offering pursuant to this prospectus and any applicable prospectus
supplement.
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LEGAL MATTERS
Unless the applicable prospectus supplement indicates otherwise, the validity of the securities in respect of which this prospectus is
being delivered will be passed upon by Wilmer Cutler Pickering Hale and Dorr LLP.
EXPERTS
The financial statements and management's assessment of the effectiveness of internal control over financial reporting (which is
included in Management's Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended
September 30, 2009 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said
firm as experts in auditing and accounting.
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NETWORK ENGINES, INC.
$40,000,000
Common Stock
Preferred Stock
Debt Securities
Depositary Shares
Purchase Contracts
Purchase Units
Warrants
PRELIMINARY PROSPECTUS
, 2010
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PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.*
Set forth below is an estimate (except in the case of the registration fee) of the amount of fees and expenses to be incurred in
connection with the issuance and distribution of the offered securities, other than underwriting discounts and commissions.
|
|
|
|
|
|
SEC registration fee
|
|
$
|
2,852
|
|
Printing and engraving
|
|
|
(1
|
)
|
Accounting services
|
|
|
(1
|
)
|
Legal fees of registrant's counsel
|
|
|
(1
|
)
|
Trustee's fees and expenses
|
|
|
(1
|
)
|
Rating agency fees
|
|
|
(1
|
)
|
Miscellaneous
|
|
|
(1
|
)
|
|
Total
|
|
$
|
2,852
|
|
-
*
-
All
amounts except the registration fee are estimated.
-
(1)
-
These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.
Item 15. Indemnification of Directors and Officers.
Section 102 of the Delaware General Corporation Law allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good
faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. The Registrant has included such a provision in its certificate of incorporation, as amended (the "Certificate of Incorporation").
Section 145
of the General Corporation Law of Delaware provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain
other persons serving at the request of the corporation in related capacities against amounts paid and expenses incurred in connection with an action or proceeding to which he is or is threatened to
be made a party by reason of such position, if such person shall have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and,
in any criminal proceeding, if such person had no reasonable cause to believe his conduct was unlawful; provided that, in the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the adjudicating court
determines that such indemnification is proper under the circumstances.
Article
EIGHTH of the Registrant's Certificate of Incorporation provides that no director of the Registrant shall be personally liable for any monetary damages for any breach of
fiduciary duty as a director, except to the extent that the Delaware General Corporation Law prohibits the elimination or limitation of liability of directors for breach of fiduciary duty.
Article
NINTH of the Certificate of Incorporation provides that a director or officer of the Registrant shall be indemnified by the Registrant against:
(a) all
expenses (including attorneys' fees), judgments, fines and amounts paid in settlement incurred in connection with any litigation or other legal proceeding (other
than an action by or in the
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right
of the Registrant) brought against him or her by virtue of his or her position as a director or officer of the Registrant if he or she acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the Registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful;
and
(b) all
expenses (including attorneys' fees) and to the extent permitted by law amounts paid in the settlement incurred in connection with any action by or in the right of
the Registrant brought against him or her by virtue of his or her position as a director or officer of the Registrant if he or she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the Registrant, except that no indemnification shall be made with respect to any matter as to which such person shall have been adjudged to be liable to
the Registrant, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses.
Notwithstanding
the foregoing, to the extent that a director or officer has been successful, on the merits or otherwise, including the dismissal of an action without prejudice, he or she
is required to be indemnified by the Registrant against all expenses (including attorneys' fees) incurred in connection therewith. Expenses shall be advanced to a director or officer at his or her
request, provided that he or she undertakes to repay the amount advanced if it is ultimately determined that he or she is not entitled to indemnification for such expenses.
Indemnification
is required to be made unless the Registrant determines that the applicable standard of conduct required for indemnification has not been met. In the event of a
determination by the Registrant that the director or officer did not meet the applicable standard of conduct required for indemnification, or if the Registrant fails to make an indemnification payment
within sixty days after such payment is claimed by such person, such person is permitted to petition the court to make an independent determination as to whether such person is entitled to
indemnification. As a condition precedent to the right of indemnification, the director or officer must give the Registrant notice of the action for which indemnity is sought and the Registrant has
the right to participate in such action or assume the defense thereof.
Article
NINTH of the Certificate of Incorporation further provides that the indemnification provided therein is not exclusive, and provides that in the event that the Delaware General
Corporation Law is amended to expand the indemnification permitted to directors or officers the Registrant must indemnify those persons to fullest extent permitted by such law as so amended.
The
Registrant maintains a directors' and officers' insurance policy that covers certain liabilities of directors and officers of the Registrant, including liabilities under the
Securities Act of 1933, as amended. The Registrant maintains a general liability insurance policy that covers certain liabilities of directors and officers of the Registrant arising out of claims
based on acts or omissions in their capacities as directors or officers.
Item 16. Exhibits.
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Exhibit No.
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Description
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1*
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Form of Underwriting Agreement
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3.1
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Second Amended and Restated Certificate of Incorporation of the Registrant, filed with the Commission on December 21, 2000 as Exhibit 3.1 to our annual report on Form 10-K and herein incorporated by
reference.
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3.2
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Third Amended and Restated By-laws of the Registrant, filed with the Commission on February 8, 2008 as Exhibit 3.01 to our current report on Form 8-K and herein incorporated by reference.
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II-2
Table of Contents
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Exhibit No.
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Description
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4.1
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Form of Senior Indenture
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4.2
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Form of Subordinated Indenture
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4.3
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Form of Senior Note
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4.4
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Form of Subordinated Note
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4.5*
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Form of Depositary Agreement
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4.6*
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Form of Warrant Agreement
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4.7*
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Form of Purchase Contract Agreement
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4.8*
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Form of Unit Agreement
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5.1
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|
Opinion of Wilmer Cutler Pickering Hale and Dorr LLP
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12.1
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Statement Regarding Computation of Ratio of Earnings to Fixed Charges
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23.1
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Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm for the Registrant
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23.2
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Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1)
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24.1
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Powers of Attorney (included in the signature pages to the Registration Statement)
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25.1**
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The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Senior Indenture
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25.2**
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The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Subordinated Indenture
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-
*
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To
be filed by amendment or by a Current Report on Form 8-K.
-
**
-
To
be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
-
(1)
-
To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration
statement:
-
(i)
-
to
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act of 1933");
-
(ii)
-
to
reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
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(iii)
-
to
include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material
change to such information in this registration statement;
provided, however,
that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by a Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of this registration statement.
-
(2)
-
That,
for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial
bona
fide
offering thereof.
-
(3)
-
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
-
(4)
-
That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
-
(i)
-
each
prospectus filed by a Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement; and
-
(ii)
-
each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the
Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of
the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
Provided,
however
, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
-
(5)
-
That,
for the purpose of determining liability of a Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the
securities, the undersigned Registrant undertakes that in a primary offering of securities of such undersigned Registrant pursuant to this registration statement, regardless of the underwriting method
used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, such undersigned Registrant will be a seller to
the purchaser and will be considered to offer or sell such securities to such purchaser:
-
(i)
-
any
preliminary prospectus or prospectus of such undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
II-4
Table of Contents
-
(ii)
-
any
free writing prospectus relating to the offering prepared by or on behalf of such undersigned Registrant or used or referred to by such undersigned
Registrant;
-
(iii)
-
the
portion of any other free writing prospectus relating to the offering containing material information about such undersigned Registrant or its
securities provided by or on behalf of such undersigned Registrant; and
-
(iv)
-
any
other communication that is an offer in the offering made by such undersigned Registrant to the purchaser.
-
(6)
-
That,
for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this 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.
-
(7)
-
That,
for purposes of determining any liability under the Securities Act of 1933:
-
(i)
-
the
information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of the registration statement as of the time
it was declared effective; and
-
(ii)
-
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.
-
(8)
-
To
file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of any Registrant pursuant to the
indemnification provisions described herein, or otherwise, each Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a Registrant of expenses incurred or paid by
a director, officer or controlling person of such 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, such Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
II-5
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Canton, Commonwealth of Massachusetts, on April 28, 2010.
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NETWORK ENGINES, INC.
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By:
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/s/ GREGORY A. SHORTELL
Name: Gregory A. Shortell
Title: President and Chief Executive Officer
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SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Network Engines, Inc. hereby severally constitute and appoint Gregory A. Shortell
and Douglas G. Bryant, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated
below the Registration Statement on Form S-3 filed herewith and any and all amendments to said Registration Statement and generally to do all such things in our name and behalf in
our capacities as officers and directors to enable Network Engines, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Registration Statement and any and all amendments thereto.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ GREGORY A. SHORTELL
Gregory A. Shortell
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President and Chief Executive Officer and Director (Principal Executive Officer)
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April 28, 2010
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/s/ DOUGLAS G. BRYANT
Douglas G. Bryant
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Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer and Principal Accounting Officer)
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April 28, 2010
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/s/ JOHN A. BLAESER
John A. Blaeser
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Director
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|
April 28, 2010
|
/s/ CHARLES A. FOLEY
Charles A. Foley
|
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Director
|
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April 28, 2010
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/s/ GARY E. HAROIAN
Gary E. Haroian
|
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Director
|
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April 28, 2010
|
II-6
Table of Contents
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Signature
|
|
Title
|
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Date
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/s/ DENNIS A. KIRSHY
Dennis A. Kirshy
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Director
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April 28, 2010
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/s/ FONTAINE K. RICHARDSON
Fontaine K. Richardson
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Director
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|
April 28, 2010
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/s/ ROBERT M. WADSWORTH
Robert M. Wadsworth
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Director
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April 28, 2010
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II-7
Table of Contents
EXHIBIT INDEX
|
|
|
Exhibit No.
|
|
Description
|
1*
|
|
Form of Underwriting Agreement
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of the Registrant, filed with the Commission on December 21, 2000 as Exhibit 3.1 to our annual report on Form 10-K and herein incorporated by
reference.
|
3.2
|
|
Third Amended and Restated By-laws of the Registrant, filed with the Commission on February 8, 2008 as Exhibit 3.01 to our current report on Form 8-K and herein incorporated by reference.
|
4.1
|
|
Form of Senior Indenture
|
4.2
|
|
Form of Subordinated Indenture
|
4.3
|
|
Form of Senior Note
|
4.4
|
|
Form of Subordinated Note
|
4.5*
|
|
Form of Depositary Agreement
|
4.6*
|
|
Form of Warrant Agreement
|
4.7*
|
|
Form of Purchase Contract Agreement
|
4.8*
|
|
Form of Unit Agreement
|
5.1
|
|
Opinion of Wilmer Cutler Pickering Hale and Dorr LLP
|
12.1
|
|
Statement Regarding Computation of Ratio of Earnings to Fixed Charges
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm for the Registrant
|
23.2
|
|
Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5.1)
|
24.1
|
|
Powers of Attorney (included in the signature pages to the Registration Statement)
|
25.1**
|
|
The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Senior Indenture
|
25.2**
|
|
The Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of the Trustee under the Subordinated Indenture
|
-
*
-
To
be filed by amendment or by a Current Report on Form 8-K.
-
**
-
To
be filed pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939.
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