-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GWiswLIzqSGWnVR0bSBL0VEGlsr5BKtR97SiE0EQDOgU2XyH2wmHYn9XLYfg75p0 kOrW9qnFiQbOfjT9LrqTnw== 0000818815-96-000006.txt : 19960911 0000818815-96-000006.hdr.sgml : 19960911 ACCESSION NUMBER: 0000818815-96-000006 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19960910 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INACOM CORP CENTRAL INDEX KEY: 0000818815 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 470681813 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-11687 FILM NUMBER: 96628031 BUSINESS ADDRESS: STREET 1: 200 FARNAM EXECUTIVE CNTR STREET 2: 10810 FARNAM DR CITY: OMAHA STATE: NE ZIP: 68154 BUSINESS PHONE: 4023923900 MAIL ADDRESS: STREET 1: 10810 FARNAM DRIVE STREET 2: SUITE 200 CITY: OMAHA STATE: NE ZIP: 68154 FORMER COMPANY: FORMER CONFORMED NAME: VALCOM INC DATE OF NAME CHANGE: 19910812 S-3 1 SUBORDINATED CONVERTIBLE DEBENTURES As filed with the Securities and Exchange Commission on September 10, 1996 Registration Statement No. 333-_____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 InaCom Corp. (Exact name of registrant as specified in its charter) Delaware 47-0681813 (State or other jurisdiction (I.R.S. Employer Identification Number) of incorporation or organization) 10810 Farnam Drive Omaha, Nebraska 68154 (402) 392-3900 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) David C. Guenthner 10810 Farnam Drive Omaha, Nebraska 68154 (Name, address, including zip code, and telephone number, including area code, of agent for service ---------------------- Copies to: David L. Hefflinger Alexander Lynch McGrath, North, Mullin & Kratz, P.C. Brobeck, Phleger & Harrison LLP Suite 1400 1301 Avenue of the Americas One Central Park Plaza New York, NY 10019 Omaha, NE 68102 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement. If the securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /x/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_| CALCULATION OF REGISTRATION FEE =================================================================================================================================== Title of each class of securities Proposed maximum Proposed to be registered Amount to be offering price maximum aggregate Amount of registered(1) per unit offering price(2) Registration Fee(1) - ----------------------------------------------------------------------------------------------------------------------------------- 6% Convertible Subordinated Debentures due June 15,2006........... $55,250,000 100% $55,250,000 $19,052 Common Stock ($.10 par value)......... 2,302,083(2) --- --- --- =================================================================================================================================== - ---------- (1) Calculated pursuant to Rule 457(i) of the Securities Act of 1933, as amended. (2) Based on a conversion price of $24 per share, but deemed to include additional shares that may be issuable pursuant to antidilution provisions. No additional registration fee is required pursuant to Rule 457(i). 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.
$55,250,000 InaCom Corp. 6% Convertible Subordinated Debentures due June 15, 2006 (Interest Payable June 15 and December 15) ------------------- The 6% Convertible Subordinated Debentures due June 15, 2006 (the "Debentures") of InaCom Corp., a Delaware corporation ("InaCom" or the "Company"), and the shares of the Company's common stock, par value $.10 per share (the "Common Stock" and, together with the Debentures, the "Securities"), issuable upon conversion of the Debentures, may be offered for sale from time to time for the account of certain holders of the Securities (the "Selling Holders") as described under "Selling Holders." The Selling Holders may from time to time sell the Securities offered hereby to or through one or more underwriters, directly to other purchasers or through agents in ordinary brokerage transactions, in negotiated transactions or otherwise, at prices related to then prevailing market prices or at negotiated prices. See "Plan of Distribution." The Company will not receive any proceeds from the sale of the Debentures or the shares of Common Stock by the Selling Holders. The Debentures are convertible at any time, unless previously redeemed, into Common Stock, at a conversion price of $24.00 per share, subject to adjustment under certain circumstances. On September __, 1996, the last reported sales price of the Common Stock on the Nasdaq National Market ("Nasdaq") was $____ per share. The Debentures are redeemable, in whole or in part, at the option of the Company, at any time on or after June 16, 2000, at the redemption prices set forth herein, plus accrued interest to the date of redemption. Each holder of Debentures may require the Company to repurchase such holder's Debentures, in whole or in part, in the event of a Change in Control (as defined herein) at a purchase price equal to 100% of the principal amount of such Debentures plus accrued interest to the date of repurchase. The Debentures are general unsecured obligations of the Company issued under an indenture dated June 14, 1996 between the Company and First National Bank of Omaha (the "Indenture") and are subordinate in right of payment to all Senior Debt (as defined herein) of the Company. The Indenture will not restrict the incurrence of Senior Debt or other indebtedness by the Company or any of its subsidiaries. The Debentures were originally issued on June 19, 1996 in the principal amount of $55,250,000 in a transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). See "Risk Factors" on pages 5 through page 7 for a discussion of certain factors that should be considered by prospective purchasers of the Securities. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. September __, 1996 1 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. and at the Commission's regional offices at 75 Park Place, New York, New York 10007 and Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material also can be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such reports, proxy statements and other information concerning the Company may be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506. The Commission maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the site is http://www.sec.gov. The Company has filed a registration statement on Form S-3 (together with all amendments and exhibits filed or to be filed in connection therewith, the "Registration Statement") under the Securities Act of 1933 (the "Securities Act") with respect to the Securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. Statements contained or incorporated by reference herein concerning the provisions of documents are necessarily summaries of such documents, and each statement is qualified in its entirety by reference to the copy of the applicable document filed with the Commission. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission pursuant to the Exchange Act are hereby incorporated by reference: (i) Annual Report on Form 10-K for the fiscal year ended December 30, 1995; (ii) Quarterly Reports on Form 10-Q for the quarters ended March 30, 1996 and June 29, 1996, (iii) Current Report on Form 8-K dated June 19, 1996, and (iv) Proxy Statement for the Annual Meeting of Stockholders held on April 18, 1996. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any and all of the documents incorporated herein by reference (not including the exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents). Requests for such copies should be directed to David C. Guenthner, Chief Financial Officer, InaCom Corp., 10810 Farnam Drive, Omaha, Nebraska 68154, Telephone: (402) 392-3900. --------------- 2 - ------------------------------------------------------------------------------- PROSPECTUS SUMMARY The following summary information is qualified in its entirety by the more detailed information and financial data appearing elsewhere, or incorporated by reference, in this Prospectus. The Company InaCom is a leading provider of technology management services to the end-user business client. The Company sells computer services, computer products, and communication products and services to a targeted client base consisting primarily of large and medium-sized corporate clients. InaCom's products and services are offered both independently and in conjunction with one another, thereby enabling the Company to provide a broad range of tailored solutions to meet specific client needs. The Company is a single source, long-term provider of products and services designed to help businesses optimize information technology investments and control ongoing costs throughout the life cycle of the client's technology systems. The Company's headquarters are located at 10810 Farnam Drive, Omaha, Nebraska 68154, and its telephone number is (402) 392-3900. The Company's internet address on the world-wide web is "http://www.inacom.com." Description of Debentures The Debentures.................. $55,250,000 of 6% Convertible Subordinated Debentures (the "Debentures") due June 15, 2006 issued under an indenture (the "Indenture") between the Company and First National Bank of Omaha as trustee (the "Trustee"). Interest Payment Dates.......... June 15 and December 15, commencing December 15, 1996. Maturity Date................... June 15, 2006 Conversion Rights............... The holders of the Debentures are entitled at any time, subject to prior redemption or repurchase, to convert the Debentures, or portions thereof (if the portions are $1,000 or whole multiples thereof) into shares of the Common Stock at the conversion price of $24.00 per share (subject to certain adjustments). See "Description of Debentures - Conversion." Optional Redemption............. The Debentures are not redeemable by the Company prior to June 16, 2000. On or after June 16, 2000 the Debentures are redeemable on at least 20 days' notice at the option of the Company, in whole or in part at any time, at the redemption prices set forth herein, in each case together with accrued interest. See "Description of Debentures - Optional Redemption." Change in Control............... Upon a Change in Control, each holder of Debentures will have the right (a "Repurchase Right") to require the Company to repurchase all of such holder's Debentures, or a portion thereof (if the portions are $1,000 or whole multiples thereof) at 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. See "Description of Debentures - Repurchase at Option of Holders Upon Change in Control." Subordination................... The payment of the principal of and premium, if any, and interest on the Debentures is subordinated in right of payment to the prior payment in full of all existing and future Senior Debt (as defined herein). The Indenture contains no limitations on the incurrence of additional Senior Debt or other indebtedness by the Company. See "Description of Debentures - Subordination." - ------------------------------------------------------------------------------- 3 - ------------------------------------------------------------------------------- Events of Default............... An Event of Default with respect to the Debentures includes the occurrence of any of the following: default for 30 days in payment of interest; default in payment of principal at maturity, upon redemption or exercise of a Repurchase Right or otherwise; default in payment on Debt (as defined herein) at maturity of at least $5,000,000 principal amount; default on Debt which results in acceleration of maturity of at least $5,000,000 principal amount of Debt; failure by the Company for 60 days after notice to it to comply in any material respect with any of its other agreements in the Indenture or the Debentures; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Debentures may declare all the Debentures to be due and payable immediately. See "Description of Debentures - Defaults and Remedies" Trading......................... There is no established market for the Debentures. Dillon, Read & Co. Inc., the initial purchaser of the Debentures, advised the Company that it intended to make a market in the Debentures but is not obligated to do so. Any market in the Debentures which it develops may be discontinued at any time without notice. Description of Common Stock The Common Stock................ 2,302,083 shares of Common Stock are issuable upon conversion of the Debentures. The Debentures are convertible into Common Stock at a conversion price of $24 per share, subject to adjustment under certain circumstances. See "Description of Capital Stock" and "Description of Debentures - Conversion." Shares Outstanding.............. On June 29, 1996, there were 10,142,339 shares of Common Stock outstanding. As of the date of this Prospectus, none of the Debentures have been converted into shares of Common Stock. Shares Outstanding if all Debentures are Converted........ 12,444,422 shares of Common Stock would be outstanding if all of the Debentures were converted into shares of Common Stock. Dividend Policy................. The Company has never declared or paid a cash dividend to stockholders. The Company's Board of Directors presently intends to retain all earnings to finance the expansion of the Company's operations and does not expect to authorize cash dividends in the foreseeable future. Any payment of cash dividends in the future will depend upon the Company's earnings, capital requirements and other factors considered relevant by the Company's Board of Directors. Certain of the Company's debt agreements restrict the amount of dividends which may be paid. Trading......................... The Common Stock is traded on the Nasdaq National Market under the symbol "INAC." - ------------------------------------------------------------------------------- 4 RISK FACTORS Prospective investors should carefully consider the specific risk factors set forth below as well as the other information contained in this Prospectus before deciding to invest in the Securities. This Prospectus contains certain forward-looking statements and information relating to the Company that are based on the beliefs of Company management as well as assumptions made by and information currently available to Company management. Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions, including the risk factors described in this Prospectus. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as believed, estimated or expected. Dependence Upon Key Vendors The Company's business is dependent in large measure upon its relationship with key vendors. A substantial portion of the Company's computer products revenue is derived from the sales of the products of key vendors, including IBM, COMPAQ, and Hewlett-Packard. During the fiscal year ended December 30, 1995, sales of IBM, COMPAQ and Hewlett-Packard products accounted for approximately 22%, 20% and 15%, respectively, of the Company's revenues. A substantial portion of the Company's communications products and services revenue is derived from the sales of products of other key vendors, including products from Lucent Technologies and services from AT&T. Although the Company considers its relationships with its key vendors to be good, there can be no assurance that these relationships will continue as presently in effect or that changes in marketing by one or more such key vendors and other suppliers would not adversely affect the Company. The Company's agreements with these vendors are on a non-exclusive basis and may be terminated by the vendors on notice typically ranging from 30 to 90 days. Termination of, or a material change to, or a nonrenewal of the Company's agreements with IBM, COMPAQ, Hewlett-Packard, Lucent Technologies or AT&T, a material decrease in the level of marketing development programs offered by computer vendors, or an insufficient or interrupted supply of vendors' product would have a material adverse effect on the Company's business. See "Business - Computer Products Sourcing Vendors." Impact of Vendor Incentive Funds The key vendors of the Company provide various incentives for promoting and marketing their product offerings. Funds received by the Company are based either on the sales of the vendor's products through the independent reseller and Company-owned channels, or on the Company's purchases from the respective vendor. The three major forms of vendor incentives received by the Company are coop funds, market development funds and vendor rebates. The funds are earned through performance of specific marketing programs or upon completion of objectives outlined by the vendors. These funds from the Company's primary vendors typically range from 1% to 3% of purchases by the Company. A material decrease in the level of vendor incentive funding would have a material adverse effect on the Company's business. See "Business - Computer Products Sourcing - Vendors." Inventory Management Risks The personal computer industry is characterized by rapid product improvement and technological change resulting in relatively short product life cycles and rapid product obsolescence, which can place inventory at considerable valuation risk. The Company's suppliers generally provide price protection intended to reduce the risk of inventory devaluation. There can be no assurance that vendors will continue such policies or that unforeseen new product developments and related inventory obsolescence will not materially adversely affect the Company's business. Funding Requirements; Interest Rate Sensitivity The Company's business requires significant working capital to finance product inventory and accounts receivable. The Company has funded its working capital requirements through a working capital financing 5 agreement involving sale of receivables, a revolving credit facility and private placement notes. There can be no assurance that the existing creditors will continue to finance the Company's operations at levels that are adequate or at all. The borrowings under these agreements bear a floating rate of interest. The Company's operating results are highly sensitive to changes in the interest rate. Such a change in the interest rate could have a material adverse effect on the Company's business. There can be no assurance that sufficient equity or debt financing will be available on terms acceptable to the Company or that the Company will be able to refinance its existing indebtedness. The inability of the Company to refinance its existing indebtedness or to obtain a sufficient amount of alternative financing would have a material adverse effect on the Company's business. Dependence Upon Key Management and Technical Personnel The Company's success depends to a significant extent on its ability to attract and retain key personnel. The Company is particularly dependent on its senior management team and technical personnel. The Company's strategy for growth in the sale of computer services and communication services depends on its ability to attract and retain qualified technical personnel, including systems engineers and communications specialists. Competition for technical personnel is intense and no assurance can be given that the Company will be able to recruit and retain such personnel. The failure to recruit and retain senior management and technical personnel could have a material adverse effect on the Company's business. Acquisitions The Company's strategy includes effecting acquisitions and strategic relationships in selected geographic market and service areas. Acquisitions involve a number of special risks, including the incorporation of acquired products and services into the Company's offerings, the potential loss of key employees of the acquired business and the valuation of the acquired business. The Company expects to issue equity securities to consummate certain acquisitions, which may cause dilution to investors acquiring Common Stock. No assurance can be given that the Company will have adequate resources to consummate acquisitions or that any such acquisitions will be successful in enhancing the Company's business. Proprietary Distribution Capabilities The Company relies upon its proprietary distribution processes, including Vision, Vista and Direct Express to provide it with a competitive advantage. The Company seeks to protect these proprietary product procurement processes. However, it is possible for third parties to replicate aspects of the Company's software, systems and processes or to obtain and use information similar to that which the Company regards as proprietary. No assurance can be given that the protective measures taken by the Company will be sufficient to preclude competitors from developing competing or similar proprietary software, systems and processes. See "Business - Computer Services." Operating Margin Risks Gross margins from the sale of computer products have been declining for several years as a result of computer product price reductions and intense competition. The Company has responded with attempts to control operating costs and with an expansion of sales of higher margin computer services and communications services. See "Business - Strategy." There can be no assurance that gross margins for computer products will not continue to decline or that the Company will be successful in controlling operating costs. Furthermore, there can be no assurance that gross margins for computer services and communications services will not also decline or that the Company will be able to successfully grow and compete in such service markets. Competition All aspects of the technology management services industry are highly competitive. The Company's distribution network competes for potential clients, including national accounts, with numerous other resellers and distributors. Several computer manufacturers have expanded their channels of distribution, pricing and product 6 positioning and compete with the Company's distribution network for potential clients. Additionally, several computer manufacturers during 1994 lessened or eliminated requirements upon independent resellers to purchase products from a single source resulting in "open sourcing" of their products; previously, such manufacturers had typically required independent resellers having contractual relationships with the Company to purchase their products from the Company. Other competitors operate mail-order or discount stores offering clones of major vendor products. The Company also competes with other computer technology sellers in the recruitment and retention of franchisees and independently-owned resellers. The Company competes in the computer services division with a large number of service providers, including IBM through ISSC, Andersen Consulting, EDS and Vanstar. Competition in the communications products and services division is also intense, and includes entities which are also significant vendors of the Company, such as Lucent Technologies and AT&T. Certain competitors and manufacturers are substantially larger than the Company and may have greater financial, technical, service and marketing resources. The level of future sales and earnings achieved by the Company in any period may be adversely affected by a number of competitive factors, including an increase in direct sales by vendors to independent resellers and/or clients and increased computer client preference for mail-order or discount store purchases of clones of major vendor products. See "Business - Competition." Subordination Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company, or in a bankruptcy, insolvency, receivership or similar proceeding relating to the Company or its property, the payment of the principal and interest on the Debentures are subordinated to the prior payment in full of all Senior Debt. No payment of principal or interest may be made by the Company, directly or indirectly, on the Debentures at any time if a default in payment of the principal or interest on Senior Debt exists, unless and until such default shall have been cured or waived or shall have ceased to exist. There are no restrictions in the Indenture upon the creation of additional Senior Debt by the Company, or on the creation of any indebtedness by the Company or any of its subsidiaries. See "Description of Debentures - Subordination of Debentures." Lack of Public Market There is no established market for the Debentures. There can be no assurance as to the continued eligibility or the liquidity of any markets that may develop for the Debentures. If any such markets were to develop, the Debentures may trade at prices that may be higher or lower than their principal amount, depending on many factors, such as prevailing interest rates and the markets for similar securities. Dillon, Read & Co., Inc. (the "Initial Purchaser") advised the Company that it intended to make a market in the Debentures. However, the Initial Purchaser is not obligated to do so, and any market making with respect to the Debentures may be discontinued at any time without notice. In addition, such market making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the pendency of the Registration Statement of which this Prospectus forms a part. The Company does not intend to apply for listing of the Debentures on any securities exchange or to seek approval for quotation through any automated quotation system. Certain Anti-Takeover Effects Certain provisions of the Company's Certificate of Incorporation and Delaware law may be deemed to have anti-takeover effects. The Company's Certificate of Incorporation provides that the Board of Directors may issue additional shares of Common Stock or establish one or more classes or a series of Preferred Stock with such designations, relative voting rights, dividend rights, liquidation and other rights that the Board of Directors fixes without stockholder approval. In addition, the Company is subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law which 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. See "Description of Capital Stock - Preferred Stock" and "Description of Capital Stock - Section 203 of the Delaware General Corporation Law." 7 RATIO OF EARNINGS TO FIXED CHARGES The Company's ratio of earnings to fixed charges for each of the periods indicated is as follows: Year Ended December Twenty-Six Weeks Ended 1991 1992 1993 1994 1995 June 24, 1995 June 29, 1996 - ---------------------------------------- -------------------------------- 2.05 2.84 2.80 0.75 2.11 1.99 2.07 The ratio of earnings to fixed charges has been computed by dividing earnings available for fixed charges (income before interest expense, interest income and income taxes plus fixed charges) by fixed charges. Fixed charges consist of interest expense (including amortization of deferred financing costs) and the portion of rental expense that is representative of the interest factor. BUSINESS General InaCom is a leading provider of technology management services to the end-user business client. The Company sells computer services, computer products, and communication products and services to a targeted client base consisting primarily of large and medium-sized corporate clients. InaCom's products and services are offered both independently and in conjunction with one another, thereby enabling the Company to provide a broad range of tailored solutions to meet specific client needs. The Company is a single source, long-term provider of products and services designed to help businesses optimize information technology investments and control ongoing costs throughout the life cycle of the client's technology systems. Recent Events The Company acquired Technology Express, a leading network integrator in the Nashville, Tennessee market in April 1996 for consideration including approximately $3,800,000 in cash and 89,286 shares of Common Stock; the business provides network integration services in addition to procurement, help desk and support services. The Company acquired the assets of Computer Access International in August 1996 for consideration including approximately $7,600,000 in cash and 238,209 shares of Common Stock; the business provides computer sales, support and rental services in the Denver, Colorado, Chicago, Illinois and Milwaukee, Wisconsin markets. Technology Management Services The Company provides a broad range of services and products which help businesses manage the increasing complexity of information technology within their organizations. The Company's services range from basic product sourcing to complete life cycle management whereby the Company handles all aspects of product procurement, configuration, distribution, integration, maintenance, upgrades and end-of-life disposal. Computer Products Sourcing Computer products include microcomputers, workstations, servers, monitors, printers and operating systems software. The Company currently distributes computer products for leading vendors such as IBM, COMPAQ, Hewlett-Packard, Toshiba, Apple, NEC, Epson, Okidata, Lexmark, NCR, Novell, Banyan, Microsoft, Oracle, 3Com, SynOptics, SCO and Network General. The Company believes it is one of IBM's largest customers on a world-wide basis. Sales of computer products accounted for 93.0% of the Company's revenues and 46.3% of the Company's earnings in 1995. Procurement. Procurement involves all activities which precede transfer of item ownership, including: business processes for purchase forecasting; needs analysis; product specification and requisitions; purchase order 8 management; order processing, tracking, and status reporting; financing; "build to order;" shipment tracking; order receiving, lost item tracking; order invoicing and invoice payments; and acceptance. As a result of its quantity purchasing capability, the Company generally obtains volume discounts from its vendors, enabling it to sell products on a more favorable basis than clients could attain on their own. The Company's advanced distribution and configuration capabilities allow the Company to fully configure (add enhancement boards, networking products and software, and test the complete system) and ship products directly to an end-user client. The Company believes it has a competitive advantage in providing procurement services through the use of the Company's proprietary Vision, Vista and Direct Express systems. o Vision -- The Company's Vision 2000 software is an automated catalog and configurator which allows a business client to obtain product information from the client's desk top computer. The client can determine product and specific feature availability, product pricing and maintenance pricing and can also determine component compatibility to configure the client's systems. o Vista -- The Company's Vista software enables a business client to enter orders directly from the client's desk top computer, track the order status from placement through delivery, and obtain inventory, credit and cash flow management information. o Direct Express -- The Company's Direct Express delivery program reduces the number of steps in the distribution process by shipping products directly to the address selected by the business client. Distribution Network. Computer products are sold through a distribution network of more than 950 business centers located throughout the United States. The Company has international affiliations in Europe, Asia, Central and South America, Canada and Mexico in order to satisfy the technology management needs of its multinational clients. The Company's direct sales force in the Company-owned stores enables the Company to establish relationships with major corporate clients for purposes of marketing the Company's technology management services and communication products and services. Through its indirect division, the Company resells products on a wholesale basis to a large base of franchisees, independent dealers and value-added resellers and receives a mark-up fee or, in some cases, a royalty. Vendors. The Company has negotiated purchase arrangements, including price, delivery, training and support, directly with most major vendors. The Company's extensive vendor relationships allows it to offer over 35,000 products in providing multiple vendor solutions to its business client's needs. During the fiscal year ended December 30, 1995, sales of IBM, COMPAQ and Hewlett-Packard products accounted for approximately 22%, 20% and 15%, respectively, of the Company's revenues. The Company's agreements with its vendors are generally on a non-exclusive basis and may be terminated by the vendors on notice typically ranging from 30 to 90 days. The agreements with vendors generally contain provisions with respect to product cost, price protection, returns and product allocations; the Company is entitled to price protection with all major vendors on eligible products in the Company's inventory in the event of vendor price reductions. Certain vendors also sponsor payment programs with several financial service organizations to facilitate product sales through the business centers. In addition, the primary vendors of the Company provide various incentives for promoting and marketing their product offerings. Funds received by the Company are based either on the sales of the vendor's products through the independent reseller and Company-owned channels, or on the Company's purchases from the respective vendor. These funds from the Company's primary vendors typically range from 1% to 3% of purchases. The funds are earned through performance of specific marketing programs or upon completion of objectives outlined by the vendors. The three major forms of vendor incentives received by the Company are cooperative funds, market development funds and vendor rebates. Coop funds are earned based upon the sale of the vendor's products and generally must be utilized to offset the costs associated with advertising and promotion pursuant to programs 9 established by the respective vendor. Market development funds are earned based upon the Company's purchases from the vendor and generally must be used for market development activities approved by the respective vendor. Vendor rebates are based upon the Company attaining purchase volume targets established with the vendor. Rebates generally can be used at the Company's discretion. Communication Products Sourcing Communication products and services include phone systems, voice mail, voice processing, data network equipment, multiple small office/home office offerings and maintenance. The Company also offers network services including long distance, 800 service, calling cards, wide area value-added data networking, video conferencing and cellular communications. Communication products and services accounted for 2.7% of the Company's revenues and 8.7% of the Company's earnings in 1995. Distribution Network. Communication products and services are provided through a network of 15 direct sales offices and contractual relationships with approximately 100 dealers. Vendors. The products of Lucent Technologies and the services of AT&T constitute approximately 90% of the voice and data systems sold by the Company. The Company believes it is one of the nation's largest independent resellers of Lucent Technologies business products and services. Computer Services The Company has developed a broad range of life cycle management computer services to help its business clients manage the ever increasing complexity of information technology. These services generally have higher gross margins than procurement services. These services include logistics services, support services, system integration services, and professional management services and can be purchased individually or as components of a complete package. The Company intends continually to add new services to further assist its business clients with the management of information technology. Computer services generated 4.3% of the Company's revenues and 45.0% of the Company's earnings in 1995. Logistics Services. Logistics services include those basic services associated with the distribution of computer hardware and software to the end-user client. These services include product configuration in which the Company installs and tests the particular software and peripherals required by the client, direct shipment of products to one or more locations for the client and special order handling, such as electronic order entry and the management of client-owned inventory. Support Services. Support services include leasing, providing demo equipment, help desk, training, maintenance, and installation for computers, communication equipment and network cabling. The Company provides extensive services which assist both its independent reseller and end-user clients manage ongoing support and training including help desk management and on-site and remote training classes. Help desk services include total call center management, call receipt, classification and problem diagnosis, problem resolution or dispatch, and performance monitoring. The Company offers a toll-free hotline to professionals that manage computer networks using operating systems from a number of leading vendors including Novell, Banyan, Microsoft, IBM, Apple and SCO. The Company's program of hardware maintenance, installation and support provides clients with options ranging from depot repair to on-site "break and fix" support and service coverage at multiple locations and is supported by a central service dispatch and service call tracking organizations. System Integration Services. System integration services include systems design and consulting which help clients design a system and select products that are appropriate for their specific needs and project planning and management services. These services permit the Company to assist a client in the actual implementation of a system, and system management services in which the Company works with a client to implement all aspects of 10 network management, database management, security management, software distribution and license control and data administration. Professional Management Services. Professional management services combine many of the services described above into a complete life cycle management product portfolio. These services include service delivery, asset management and procurement management. Service delivery comprises the labor and management required actually to manage a client's service organization, such as handling service requests, generating work orders, managing personnel (Company and client), and managing service parts inventories. Asset management consists of the registration, tracing and disposal of computer hardware and software as it moves throughout an organization. Asset management services are becoming increasingly important as businesses struggle to understand what capabilities their existing computers have and whether, when and how to upgrade to the latest technology. Under procurement management, the Company accepts responsibility for the entire purchasing process for its client and generally has its own personnel at a client location managing the process. This function draws upon the Company's capabilities described above, including system design and planning, needs analysis, product specification and requisitions, purchase order management, order processing and tracking, financing and leasing, configuration, testing and delivery and installation. Communication Services The Company provides communication services using its North American Support Center as a single point of contact for all data and voice cabling and wiring needs. The Company also offers project management, maintenance and 24-hour technical support through a network of independent certified technicians and customer support personnel. The Company provides complete communication system design, installation and maintenance. Network Services. The Company provides network services with advanced digital capabilities enabling voice, data and video communications utilizing AT&T, Frontier and Westinghouse networks. Services include long distance, inbound 800 service, calling cards and teleconferencing featuring account codes, enhanced billing and customized call reports which allow business clients to restrict and track telecommunications activity. Convergent Technology Services. The Company offers convergence solutions centered around wide area data networks, computer telephone integration, desktop video conferencing and wireless data communications. These services include specialized support programs, maintenance programs and specialized software. International Capabilities To satisfy the technology management service needs of its multinational clients, the Company has established affiliations with the International Computer Group (Europe and Asia) and GE Hamilton Technology Services (Canada). InaCom Latin America, the Company's 60% owned subsidiary, provides international logistics and configuration services in Mexico, the Caribbean, Central and South America. Clients The Company believes its client base of large and medium-sized businesses is most likely to benefit from the cost savings obtainable through the technology management services offered by the Company. The Company is not dependent for a material part of its business upon a single or a few clients and the loss of any one client would not have a material adverse effect on the Company's business. 11 Service Mark and Trademark The Company holds United States service mark and trademark registrations for the marks "Inacom", "ValCom" and "Inacomp." The Company also has certain state registrations. The Company claims common law rights to the marks based on adoption and use. To the Company's knowledge, there are no pending interference, opposition or cancellation proceedings, or litigation threatened or claimed, with respect to the marks in any jurisdiction. Government Regulation The Company is subject to a substantial number of state laws regulating franchise relationships. The Company is also subject to Federal Trade Commission rules governing disclosure requirements in the granting of franchises. Such laws generally impose registration and/or disclosure requirements on the Company in the offer and sale of franchises and also regulate related advertisements. The Company believes it is in substantial compliance with all such regulations. Competition All aspects of the technology management services industry are highly competitive. The Company's distribution network competes for potential clients, including national accounts, with numerous other resellers and distributors. Several computer manufacturers have expanded their channels of distribution, pricing and product positioning and compete with the Company's distribution network for potential clients. Additionally, several computer manufacturers during 1994 lessened or eliminated requirements upon independent resellers to purchase products from a single source resulting in "open sourcing" of their products; previously, such manufacturers had typically required independent resellers having contractual relationships with the Company to purchase their products from the Company. Other competitors operate mail-order or discount stores offering clones of major vendor products. The Company also competes with other computer technology sellers in the recruitment and retention of franchisees and independently-owned resellers. The Company competes in the computer services division with a large number of service providers, including IBM through ISSC, Andersen Consulting, EDS, ENTEX, CompuCom and Vanstar. Competition in communication products and services is also intense, and includes entities which are also significant vendors of the Company, such as Lucent Technologies and AT&T. Certain competitors and manufacturers are substantially larger than the Company and may have greater financial, technical, service and marketing resources. The Company's distribution network competes primarily on the basis of professionalism and client contact, quality of product line, availability of products, service, after-sale support, price, and quality of end-user training. The computer manufacturers' expansion of their channels of distribution including direct distribution, open sourcing, employment of selective resellers, pricing and product positioning has put pressure on hardware gross margins. The Company believes its ability to deliver technology management services which consist of technology procurement services, system integration services and support services provides its client base with value added services that will differentiate the Company from alternative distribution channels and will mitigate the impact of added competitive pressures caused by economic conditions and manufacturers' continuing expansion of their channels of distribution, pricing and product positioning. DESCRIPTION OF DEBENTURES The Debentures were issued under an Indenture entered into between the Company and First National Bank of Omaha, as trustee (the "Trustee") dated June 14, 1996. The following statements are subject to the detailed provisions of the Indenture and are qualified in their entirety by reference to the Indenture, a copy of which was previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 29, 1996 and incorporated herein by reference and is also available for inspection at the office of the Trustee. Wherever 12 particular provisions of the Indenture are referred to, such provisions are incorporated by reference as a part of the statements made, and the statements are qualified in their entirety by such reference. General The Debentures are unsecured general obligations of the Company, subordinate in right of payment to certain other obligations of the Company as described under "Subordination of Debentures," and convertible into Common Stock as described under "Conversion." The Debentures will mature on June 15, 2006. The Debentures will be limited to $55,250,000 aggregate principal amount. The Company will pay interest on the Debentures semi-annually on June 15 and December 15 of each year, commencing December 15, 1996 at the rate of 6% per annum and will pay interest on the Debentures (except defaulted interest) to the persons who are registered holders of Debentures at the close of business on the preceding June 1 and December 1, respectively (subject to certain exceptions in the case of Debentures redeemed or repurchased upon a Change in Control between a record date and the next succeeding interest payment date). The Company may pay principal and interest by check and may mail an interest check to a holder's registered address. Holders must surrender Debentures to the Paying Agent to collect principal payments. The Debentures were originally sold to Qualified Institutional Buyers ("QIBs") and are represented by a restricted global Debenture in definitive, fully registered form, deposited with The Depository Trust Company ("DTC"). Beneficial interests in the global Debentures will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. The Debentures are issued without coupons in denominations of $1,000 and whole multiples of $1,000. A holder may transfer or exchange Debentures in accordance with the Indenture. No service charge will be made for any registration of transfer, exchange or conversion of Debentures, except for any tax or other governmental charges that may be imposed in connection with any transfers, registration of transfers or exchanges. The registrar for the Debentures need not transfer or exchange any Debentures selected for redemption. Also, it need not transfer or exchange any Debentures for a period of 15 days before selecting Debentures to be redeemed. The registered holder of a Debenture may be treated as its owner for all purposes. The Trustee currently acts as Registrar, Paying Agent and Conversion Agent. The Company may appoint an additional, or change any, Paying Agent, Registrar, Conversion Agent without notice. The Company may act in any such capacity. The Indenture does not contain any restrictions on the payment of dividends or on the repurchase of securities of the Company or any financial covenants, nor does the Indenture require the Company to maintain any sinking fund or other reserves for repayment of the Debentures. Conversion The holders of the Debentures are entitled at any time before the close of business on the date of maturity of the Debentures, subject to prior redemption or repurchase, to convert the Debentures, or portions thereof (if the portions are $1,000 or whole multiples thereof) into shares of Common Stock at the conversion price of $24.00 per share (subject to adjustments as described below). Except as described below, no payment or adjustment will be made for accrued interest on a converted Debenture or for dividends on any Common Stock issued on conversion. If any Debenture is converted between a record date for the payment of interest and the next succeeding interest payment date, unless such Debenture has been called for redemption on a redemption date between such dates, such Debenture must be accompanied by funds equal to the interest payable to the registered holder on such interest payment date on the principal amount so converted. A Debenture converted on an interest payment date need not be accompanied by any payment, and the interest on the principal amount of the Debenture being converted will be paid on such interest payment date to the registered holder of such Debenture on the immediately preceding record date. The Company will not issue fractional shares of Common Stock upon conversion of Debentures and 13 instead will deliver a check in lieu of the fractional share based upon the market value of the Common Stock on the last trading day prior to the conversion date. In the case of Debentures called for redemption, conversion rights will expire at the close of business on the business day preceding the redemption date unless the Company defaults in the payment of the redemption price. In the event any holder exercises its Repurchase Right (as defined below), such holder's conversion right will terminate upon receipt of the written notice of exercise of such Repurchase Right. See "Repurchase at Option of Holders Upon Change in Control." In the case of Debentures called for redemption on a redemption date between a record date and the opening of business on the next succeeding interest payment date, no interest will be payable on any such Debentures converted during such period. The conversion price is subject to adjustment as set forth in the Indenture in certain events, including the payment of dividends or distributions on the Common Stock in shares of capital stock; subdivisions or combinations of the Common Stock into a greater or smaller number of shares; a reclassification of the Common Stock resulting in an issuance of any shares of the capital stock of the Company; the distribution of rights or warrants to all holders of Common Stock entitling them for a period of sixty days or less to purchase Common Stock at less than the then current market price at that time; and the distribution to all holders of Common Stock of assets or debt securities or any rights or warrants to purchase securities, other than Common Stock, of the Company (other than cash dividends or cash distributions payable out of consolidated net income or retained earnings). No adjustment will be required for rights to purchase Common Stock pursuant to any plan of the Company for reinvestment of dividends or interest, or for a change in the par value of the Common Stock. To the extent that Debentures become convertible into cash, no adjustment will be required thereafter as to cash. No adjustment in the conversion price will be made unless such adjustment would require a change of at least $.25 in the conversion price; however, any adjustment that would otherwise be required to be made shall be carried forward and taken into account at the earlier of any subsequent adjustment or three years after the occurrence of the event giving rise to the adjustment. The Company reserves the right to make such reductions in the conversion price in addition to those required in the foregoing provisions as the Company in its discretion shall determine to be advisable in order that certain stock-related distributions hereafter made by the Company to its stockholders shall not be taxable. Except as stated above, the conversion price will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock, or carrying the right to purchase any of the foregoing. If the Company reclassifies the Common Stock or merges into, or transfers or leases substantially all of its assets to, another corporation, the holders of the Debentures then outstanding will be entitled thereafter to convert such Debentures into the kind and amount of shares of capital stock, other securities, cash or other assets which they would have owned immediately after such event had such Debentures been converted immediately before the effective date of the transaction. Conversion price adjustments may in certain circumstances result in constructive distributions that could be taxable as dividends under the Internal Revenue Code of 1986, as amended, to holders of Debentures or to holders of Common Stock issued upon conversion thereof. Optional Redemption The Debentures may be redeemed on at least 20 and not more than 60 days notice at the option of the Company, in whole at any time or in part from time to time, at the following redemption prices (expressed as percentages of principal), together with accrued interest to the date fixed for redemption, during the twelve month period beginning June 15 in the years set forth below: 14 Year Percentage 2000 . . . . . . . 103.3% 2001 . . . . . . . 102.7 2002 . . . . . . . 102.0 2003 . . . . . . . 101.3 2004 . . . . . . . 100.7 and thereafter at 100% of the principal amount, plus accrued interest; provided, that no redemption may be made prior to June 16, 2000. If less than all the Debentures are to be redeemed, the Trustee will select the Debentures to be redeemed on a pro rata basis, by lot or by any other method the Trustee, in its discretion, deems fair. Repurchase at Option of Holders Upon Change in Control Upon any Change in Control (as defined below) with respect to the Company, each holder of Debentures shall have the right (the "Repurchase Right"), at the holder's option, to require the Company to repurchase all of such holder's Debentures, or a portion thereof which is $1,000 or any integral multiple thereof, on the date (the "Repurchase Date") that is 45 days after the date of the Company Notice (as defined below) at a price equal to 100% of the principal amount of the Debentures, plus accrued interest, if any, to the Repurchase Date. Within 30 days after the occurrence of a Change in Control, the Company is obligated to mail to all holders of record of the Debentures a notice (the "Company Notice") of the occurrence of such Change in Control and the Repurchase Right arising as a result thereof. The Company shall deliver a copy of the Company Notice to the Trustee and shall cause a copy of such notice to be published in The Wall Street Journal or another newspaper of national circulation. To exercise the Repurchase Right, a holder of Debentures must deliver on or before the 30th day after the date of the Company Notice irrevocable written notice to the Company (or an agent designated by the Company for such purpose) and the Trustee of the holder's exercise of such right together with the Debentures with respect to which the right is being exercised, duly endorsed for transfer. Change in Control A "Change in Control" of the Company means (i) the acquisition by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, (excluding, for this purpose, the Company or its subsidiaries, or any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors; or (ii) individuals who, as of the date of the Indenture, constitute the Board of Directors (as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; or (iii) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Company's then outstanding voting securities; or (iv) a liquidation or dissolution of the Company (other than pursuant to the United States Bankruptcy Code) or of the conveyance, transfer or leasing of all or substantially all of the assets of the Company. 15 No quantitative or other established meaning has been given to the phrase "all or substantially all" (which appears in the definition of Change in Control) by courts which have interpreted this phrase in various contexts. In interpreting this phrase, courts make a subjective determination as to the portion of assets conveyed, considering such factors as the value of assets conveyed and the proportion of an entity's income derived from the assets conveyed. To the extent the meaning of such phrase is uncertain, uncertainty will exist as to whether or not a Change in Control may have occurred (and, accordingly, whether or not the holders of Debentures will have the right to require the Company to repurchase their Debentures). The occurrence of a Change in Control would, in most cases, permit the lenders to require prepayment of some or all amounts outstanding under the Company's short-term and long-term debt agreements. In the event of a Change in Control, any repurchase of the Debentures could, absent payment in full of any amounts outstanding under such credit facilities or waiver, be prevented by the subordination provisions of the Debentures. See "Subordination of Debentures." Failure by the Company to repurchase the Debentures when required will result in an Event of Default with respect to the Debentures whether or not such repurchase is permitted by the subordination provisions. The right to require the Company to repurchase the Debentures could delay or deter a Change in Control of the Company, whether or not such Change in Control were supported by the Board of Directors of the Company. If a Change in Control occurs, there can be no assurance that the Company would have sufficient funds or financing to repay any Senior Debt then required to be repaid or to repurchase any or all Debentures then required to be repurchased under the Indenture. If an offer is made to repurchase Debentures as a result of a Change in Control, the Company intends to comply with all tender offer rules, including but not limited to Section 13(e) and 14(e) under the Exchange Act and Rules 13c-1 and 14c-1 thereunder, to the extent applicable to such offer. Subordination of Debentures Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, the payment of the principal of and premium, if any, and interest on the Debentures will be subordinated, to the extent provided in the Indenture, in right of payment to the prior payment in full of all Senior Debt. No payment of principal of or premium, if any, or interest may be made by the Company, directly or indirectly, on the Debentures (including any repurchase pursuant to the exercise of the Repurchase Right) or to acquire any of the Debentures at any time if a default in payment of the principal of or premium, if any, or interest on Senior Debt exists, unless and until such default shall have been cured or waived or shall have ceased to exist. During the continuance of any event of default with respect to any Senior Debt, as such event of default is defined under any such Senior Debt or in any agreement pursuant to which any Senior Debt has been issued (other than default in payment of the principal of, or premium, if any, or interest on any Senior Debt), permitting the holders thereof to accelerate the maturity thereof, no payment may be made by the Company, directly or indirectly, with respect to principal of or premium, if any, or interest on the Debentures for 90 days following written notice to the Company, from any holder or holders thereof or their representative or representatives or the trustee or trustees under any indenture under which any instrument evidencing any such Senior Debt may have been issued, that such an event of default has occurred and is continuing. However, if the maturity of such Senior Debt is accelerated, no payment may be made on the Debentures until such Senior Debt that has matured has been paid or such acceleration has been cured or waived. Senior Debt is defined in the Indenture as Debt (as defined below) of the Company outstanding at any time except Debt that by its terms is subordinate in right of payment to the Debentures or Debt that is not otherwise senior in right of payment to the Debentures. Senior Debt does not include Debt of the Company to any of its subsidiaries. Debt is defined with respect to any person as the principal of, and premium, if any, and interest on 16 (a) all indebtedness of such person for borrowed money (including all indebtedness evidenced by notes, bonds, debentures or other securities sold by such person for money), (b) all indebtedness incurred by such person in the acquisition (whether by way of purchase, merger, consolidation or otherwise and whether by such person or another person) of any business, real property or other assets (except assets acquired in the ordinary course of the conduct of the acquiror's usual business), (c) guarantees by such person of indebtedness described in clause (a) or (b) of any other person, (d) all renewals, extensions, refundings, deferrals, restructurings, amendments and modifications of any such indebtedness, obligation or guarantee (e) all reimbursement obligations of such person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such person, (f) all capital lease obligations of such person, and (g) all net obligations of such person under interest rate swap or similar agreements of such person. There are no restrictions in the Indenture upon the creation of additional Senior Debt by the Company, or on the creation of any indebtedness by the Company or any of its subsidiaries. By reason of the subordination provisions described above, in the event of insolvency, funds which would otherwise be payable to Debentureholders will be paid to the holders of Senior Debt to the extent necessary to pay Senior Debt in full. As a result of these payments, general creditors of the Company may recover less, ratably, than holders of Senior Debt and such general creditors may recover more, ratably, than holders of Debentures or other subordinated indebtedness of the Company. Merger or Consolidation The Indenture will not permit the Company to consolidate with, or merge into, or transfer or lease all or substantially all of its assets to, another person unless such other person is a corporation organized under the laws of the United States, any State thereof or the District of Columbia and such person assumes by supplemental indenture all the obligations of the Company under the Debentures and the Indenture, and immediately after giving effect to the transaction, no default shall exist. Defaults and Remedies An Event of Default includes the occurrence of any of the following: default for 30 days in payment of interest; default in payment of principal at maturity, upon redemption or exercise of a Repurchase Right or otherwise; default in payment on Debt at maturity of at least $5,000,000 principal amount and continuance of such default for 30 days after notice given in accordance with the Indenture; default on Debt which results in acceleration of maturity of at least $5,000,000 principal amount of Debt without such acceleration having been cured, waived, rescinded, or annulled for 30 days after notice given in accordance with the Indenture; failure by the Company for 60 days after notice to it to comply in any material respect with any of its other agreements in the Indenture or the Debentures; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the Debentures may declare all the Debentures to be due and payable immediately, except for defaults due to certain events of bankruptcy or insolvency in which case if an Event of Default occurs and is continuing, automatically the principal of all the Debentures and the interest thereon shall become immediately due and payable. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Debentures. Subject to certain limitations, holders of a majority in principal amount of the Debentures may direct the Trustee in its exercise of any trust power. The Trustee may withhold from Debentureholders notice of any default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company is required to file with the Trustee annually an officers' statement as to the absence of defaults in fulfilling any of its obligations under the Indenture. Modifications of the Indenture The Company and the Trustee may amend the Indenture without notice to any Debentureholder but with the written consent of the holders of a majority in principal amount of the outstanding Debentures. However, without the consent of each Debentureholder affected, an amendment may not: (i) reduce the amount of Debentures 17 whose holders must consent to an amendment; (ii) reduce the rate or change the time for payment of interest on any Debenture; (iii) reduce the principal of or change the fixed maturity of any Debenture (including, without limitation, the optional redemption provisions or the Repurchase Right); (iv) make any Debenture payable in money, other than that stated in the Debenture; (v) change the provisions of the Indenture regarding the right of a majority of the Debentureholders to waive defaults under the Indenture or impair the right of any Debentureholder to institute suit for the enforcement of any payment of principal and interest on the Debentures on and after their respective due dates; (vi) make any change that adversely affects the rights to convert any Debenture; or (vii) make any change in the subordination provision that adversely affects the rights of any Debentureholder. Satisfaction and Discharge of Indenture The Indenture will be discharged and cancelled upon the satisfaction of certain conditions, including the payment of all the Debentures or the deposit with the Trustee, within not more than six months prior to the maturity or redemption of all of the Debentures, of funds sufficient for such payment or redemption. Reports to Holders of Debentures The Company will regularly furnish to each holder of Debentures copies of its annual report to stockholders, containing audited financial statements, and any other financial reports which the Company furnishes to its stockholders. Trustee and Transfer Agent The Trustee and transfer agent for the Debentures is First National Bank of Omaha. First National Bank of Omaha currently serves as the transfer agent for the Common Stock. Book Entry The Depository Trust Company ("DTC"), New York, New York acts as securities depository for the Debentures. The Debentures were issued as fully-registered securities bearing the name of Cede & Co. (DTC's nominee) in the form of one "Global Debenture" and deposited with DTC on June 19, 1996. A purchaser of Debentures may hold its interest in the Global Debenture directly through DTC if such purchaser is a participant in DTC, or indirectly through organizations which are participants in DTC (the "Participants"). Transfers between Participants will be effected in the ordinary way in accordance with DTC rules and will be settled in same day funds. The laws of some states require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests in the Global Debenture to such persons may be limited. Purchasers of Debentures who are not Participants may beneficially own interests in the Global Debenture held by DTC only through Participants or certain banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is the registered owner of the Global Debenture, Cede for all purposes will be considered the sole holder of the Global Debenture. Payment of interest on and the redemption price of the Global Debenture will be made to Cede, the nominee for DTC as the registered owner of the Global Debenture by wire transfer of immediately available funds on each interest payment date. Neither the Company, the Trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of a beneficial ownership interest in the Global Debenture or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. 18 Because DTC can only act on behalf of Participants, who in turn act on behalf of Indirect Participants and certain banks, the ability of a person having a beneficial interest in the principal amount represented by the Global Debenture to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest. Neither the Company nor the Trustee (or any registrar, paying agent or conversion agent under the Indenture) will have any responsibility for the performance by DTC or its Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations. DTC has advised the Company that it will take any action permitted to be taken by a holder of Debentures (including, without limitation, the presentation of Debentures for exchange as described below) only at the direction of one or more Participants to whose account DTC interests in the Global Debenture are credited and only in respect of the principal amount of the Debentures represented by the Global Debenture as to which such Participant or Participants has or have given such direction. The Company has been informed by DTC that with respect to any payment of the principal of, premium, if any, and interest on, the Global Debenture, DTC's practice is to credit Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Debenture as shown on the records of DTC or its nominee, unless DTC has reason to believe that it will not receive payment on such payment date. Payments by Participants to owners of beneficial interests in the principal amount represented by the Global Debenture held through such Participants will be the responsibility of such Participants, as is now the case with securities held for the accounts of customers registered in "street name." DTC has advised the Company as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its Participants and to facilitate the clearance and settlement of securities transactions between Participants through electronic book-entry changes in accounts of its Participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Certain of such Participants (or their representatives), together with other entities, own DTC. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Debenture among participants of DTC, it is under no obligation to perform such procedures, and such procedures may be discontinued at any time. Neither the Company nor the Trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. If DTC is at any time unwilling or unable to continue as a depositary for the Global Debenture and a successor depositary is not appointed by the Company, within 90 days, the Company will issue Debentures in definitive form in exchange for the Global Debenture. DESCRIPTION OF CAPITAL STOCK The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, par value $.10 per share, and 1,000,000 shares of Class A Preferred Stock, par value $1.00 per share. As of June 29, 1996, there were 10,142,339 shares of Common Stock outstanding and no shares of Class A Preferred Stock outstanding. 19 Common Stock Holders of outstanding Common Stock are entitled to such dividends as may be declared by the Company Board of Directors out of the assets legally available for that purpose, and are entitled to one vote per share on all matters submitted to a vote of the stockholders of the Company. The holders of shares of Common Stock do not have cumulative voting rights. Therefore, the holders of more than 50% of the Common Stock voting for the election of directors can elect all the directors, and the remaining holders will not be able to elect any directors. The holders of Common Stock have no pre-emptive or other subscription rights, and there are no conversion or redemption or sinking fund provisions with respect to such shares. All of the outstanding shares of Common Stock will be, when issued upon conversion of the Debentures, duly authorized, validly issued, fully paid and nonassessable. Preferred Stock The Company Board of Directors is authorized to issue up to 1,000,000 shares of Class A Preferred Stock in one or more series, from time to time, with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations and restrictions thereof, as may be provided in a resolution or resolutions adopted by the Company Board of Directors. The authority of the Company Board of Directors includes, but is not limited to, the determination or fixing of the following with respect to shares of such class or any series thereof: (i) the number of shares; (ii) the dividend rate and the date from which dividends are to be cumulative; (iii) whether shares are to be redeemable and, if so, the terms and amount of any sinking fund providing for the purchase or redemption of such shares; (iv) whether shares shall be convertible, and, if so, the terms and provisions thereof; (v) what restrictions are to apply, if any, on the issue or reissue of any additional Class A Preferred Stock; and (vi) whether shares have voting rights. Shares of Class A Preferred Stock may be issued with a preference over the Common Stock as to the payment of dividends. No shares of Class A Preferred Stock have been issued. Classes of stock such as the Class A Preferred Stock may be used, in certain circumstances, to create voting impediments on extraordinary corporate transactions or to frustrate persons seeking to effect a merger or otherwise to gain control of the Company. For the foregoing reasons, any shares of Class A Preferred Stock issued by the Company could have an adverse effect on the rights of the holders of the Common Stock. The Company has no present plans to issue any shares of Class A Preferred Stock. Liquidation and Other Rights Upon liquidation, the holders of Common Stock are entitled to share ratably in assets available for distribution to stockholders after satisfaction of any liquidation preferences of any outstanding preferred stock. The issuance of any shares of series of Class A Preferred Stock in future financings, acquisitions or otherwise may result in dilution of voting power and relative equity interest of the holders of shares of Common Stock and will subject the Common Stock to the prior dividend and liquidation rights of the outstanding shares of the series of preferred stock. Advance Notice Requirements in Connection with Stockholder Meetings The Company bylaws establish an advance notice procedure for bringing business before an annual meeting of stockholders and for nominating (other than by or at the direction of the Board of Directors) candidates for election as directors at a meeting of stockholders. To be timely, notice of business to be brought before an annual meeting or nominations of candidates for election of directors at a meeting must be received by the Secretary of the Company not less than 30 nor more than 60 days prior to the meeting. In the event that less than 40 days' notice or prior public disclosure of the date is given or made to stockholders, notice by the stockholder must be received 20 no later than the tenth day following the date on which notice of the date of the meeting was mailed or public disclosure thereof was made. Section 203 of the Delaware General Corporation Law Section 203 of the General Corporation Law of the Delaware 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 upon consummation of such transaction the interested stockholder owned 85% of the voting stock of the corporation outstanding at the time the transaction commenced or unless the business combination is, or the transaction in which such person became interested stockholder was, approved in a prescribed manner. A "business combination" includes a merger, an asset sale and any other transaction resulting in a financial benefit to the interested stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns 15% or more of the corporation's voting stock. Transfer Agent The transfer agent for the Common Stock is First National Bank of Omaha, Omaha, Nebraska. SELLING HOLDERS The Debentures were initially issued and sold pursuant to a Purchase Agreement dated as of June 14, 1996 between the Company and Dillon, Read & Co. Inc., the Initial Purchaser. The Debentures were acquired from the Initial Purchaser by the Selling Holders in compliance with Rule 144A under the Securities Act, or in other permitted resale transactions from the Initial Purchaser or holders who acquired such Debentures from the Initial Purchaser or other prior holders thereof in further permitted resale transactions exempt from registration under the Securities Act. The Company agreed to indemnify and hold the Initial Purchaser harmless against certain liabilities under the Securities Act that would arise in connection with the sale of the Debentures by the Initial Purchaser. Except as otherwise indicated, the table below sets forth certain information with respect to the Securities as of September 6, 1996. The term "Selling Holders" includes the beneficial owners of the Securities listed below and their transferees, pledgees, donees or other successors. Aggregate Principal Number of Shares Amount of Debentures of Common Stock Name That May Be Sold That May Be Sold* Bank of New York $ 5,373,000 223,875 Bear Stearns Securities Corp. 2,127,000 88,625 Boston Safe Deposit & Trust Co. 10,800,000 450,000 Brown Bros Harriman & Co. 6,000,000 250,000 Citibank, N.A.3,000,000 125,000 Dillon, Read & Co. Inc. 3,280,000 136,667 First Interstate Bank of California 1,945,000 81,042 Glynn (J.A.) & Company 215,000 8,958 Lehman Brothers, Inc. 750,000 31,250 Lehman Brothers International 850,000 35,417 Mercantile, Safe Deposit and Trust Company 480,000 20,000 NBD Bank, N.A. 1,500,000 62,500 Northern Trust Co.-Trust 1,185,000 49,375 PaineWebber Incorporated 500,000 20,833 Regional Operations Group Inc. 35,000 1,458 21 Republic New York Securities Corp. 750,000 31,250 SSB Custodian 13,610,000 567,083 Wachovia Bank North Carolina 1,100,000 45,833 Wagner, Stott & Co. 1,750,000 72,917 *Assumes a conversion price of $24.00 per share. The preceding table has been prepared based upon information furnished to the Company by the Depository Trust Company and by or on behalf of the Selling Holders. The information concerning the Selling Holders may change from time to time and will be set forth in Supplements to this Prospectus. In addition, the per share conversion price and, therefore, the number of shares of Common Stock issuable upon conversion of the Debentures is subject to adjustment under certain circumstances as specified in the Indenture. Accordingly, the aggregate principal amount of Debentures and the number of shares of Common Stock issuable upon conversion of the Debentures may change. As of the date of this Prospectus, the aggregate principal amount of Debentures outstanding is $55,250,000, which may be converted into 2,302,083 shares of Common Stock. Because the Selling Holders may offer all or some of the Debentures and shares of Common Stock issued upon conversion thereof from time to time pursuant to this Prospectus, no estimate can be given as to the principal amount of Debentures or shares of Common Stock that will be held by the Selling Holders after completion of this offering. See "Plan of Distribution." PLAN OF DISTRIBUTION Pursuant to a Registration Rights Agreement dated June 14, 1996 between the Company and the Initial Purchaser, a Selling Holder may distribute Securities under this Prospectus from time to time for a 45-day period (the "Selling Period") only if the Selling Holder gives written notice to the Company at least three business days prior to the Selling Period. The Company may suspend the use of this Prospectus and any supplements hereto in certain circumstances due to pending corporate developments, order of the Commission or state authorities or similar events or to supplement or amend the Prospectus. The Company is obligated in the event of such suspension to use its best efforts to ensure that the use of the Prospectus may be resumed as soon as practicable. The Selling Holders may sell all or a portion of the Debentures and shares of Common Stock beneficially owned by them and which may be offered hereby from time to time during a Selling Period on any exchange or market on which the securities are listed or quoted, as applicable, on terms to be determined at the times of such sales. The Selling Holders may also make private sales directly or through a broker or brokers. Alternatively, any of the Selling Holders may from time to time offer the Debentures or shares of Common Stock during a Selling Period which may be offered hereby and beneficially owned by them through underwriters, dealers or agents, who may receive compensation in the form of underwriting discounts, commissions or concessions from the Selling Holders and the purchasers of the Debentures or shares of Common Stock for whom they may act as agent. Such dealers may include the Initial Purchaser, which may perform investment banking or other services for or engage in other transactions with the Company from time to time in the future. To the extent required, the aggregate principal amount of Debentures and number of shares of Common Stock to be sold hereby, the names of the Selling Holders, the purchase price, the name of any such agent, dealer or underwriter and any applicable commissions, discounts or other terms constituting compensation with respect to a particular offer during a Selling Period will be set forth in an accompanying Prospectus Supplement. The aggregate proceeds to the Selling Holders from the sale of the Debentures or shares of Common Stock offered by 22 them hereby will be the purchase price of such Debentures or shares of Common Stock less discounts and commissions, if any. The Debentures and the shares of Common Stock which may be offered hereby may be sold from time to time during a Selling Period in one or more transactions at fixed offering prices, which may be changed, or at varying prices determined at the time of sale or at negotiated prices. Such prices will be determined by the holders of such securities or by agreement between such holders and underwriters or dealers who may receive fees or commissions in connection therewith. The outstanding Common Stock is listed for trading on Nasdaq National Market, and the shares of Common Stock issuable upon conversion of the Debentures have been authorized for listing on Nasdaq National Market. There is no assurance as to the development or liquidity of any trading market that may develop for the Debentures. In order to comply with the securities laws of certain states, if applicable, the Debentures and shares of Common Stock offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the Debentures and shares of Common Stock offered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and compliance with same is effected. 23 The Selling Holders and any broker-dealers, agents or underwriters that participate with the Selling Holders in the distribution of the Debentures or shares of Common Stock offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act, in which event any commissions or discounts received by such broker-dealers, agents or underwriters and any profit on the resale of the Debentures or shares of Common Stock offered hereby and purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. The Company and the Selling Holders have agreed to indemnify each other against certain liabilities arising under the Securities Act. The Company has agreed to pay all expenses incident to the offer and sale of the Debentures and Common Stock offered hereby by the Selling Holders to the public, other than selling commissions and fees. LEGAL MATTERS The validity of the Securities offered hereby have been passed upon for the Company and the Selling Holders by McGrath, North, Mullin & Kratz, P.C., Omaha, Nebraska 68102. EXPERTS The consolidated financial statements and schedules of InaCom Corp. as of December 30, 1995 and December 31, 1994, and for each of the years in the three-year period ended December 30, 1995, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 24 No dealer, salesman or other person has been authorized to give any information or to make any representations not contained in this Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or the Selling Stockholders. This Prospectus does not constitute an offer of any securities other than those to which it relates or an offer to sell, or the solicitation of an offer to buy, the Securities in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to the date hereof. ----------------- TABLE OF CONTENTS Page ---- Available Information......................... 2 Incorporation of Certain Documents By Reference....................... 2 Prospectus Summary............................ 3 Risk Factors.................................. 5 Ratio of Earnings to Fixed Charges............ 8 Business.. 8 Description of Debentures..................... 12 Description of Capital Stock.................. 19 Selling Holders............................... 21 Plan of Distribution.......................... 22 Legal Matters................................. 24 Experts....................................... 24 InaCom Corp. -------------- PROSPECTUS September __, 1996 ------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following table sets forth the various expenses and costs (other than underwriting discounts and commissions) expected to be incurred in connection with the sale and distribution of the securities being registered. All of the amounts shown are estimated except the registration fees of the Commission and the National Association of Securities Dealers, Inc. =============================================================== Item Amount to be paid by Company - --------------------------------------------------------------- SEC registration fee $ 19,052 - --------------------------------------------------------------- NASD filing fee 17,500 - --------------------------------------------------------------- Printing and engraving 25,000 expenses - --------------------------------------------------------------- Accounting fees and 10,000 expenses - --------------------------------------------------------------- Legal fees and expenses 20,000 - --------------------------------------------------------------- Blue Sky fees and 10,000 expenses - --------------------------------------------------------------- Miscellaneous 3,448 - --------------------------------------------------------------- Total 105,000 =============================================================== II-1 Item 15. Indemnification of Directors and Officers. Pursuant to Article VII of the Certificate of Incorporation of InaCom, InaCom shall, to the extent required, and may, to the extent permitted, by Section 102 and Section 145 of the General Corporation Law of the State of Delaware, indemnify and reimburse all persons whom it may indemnify and reimburse pursuant thereto. No director shall be liable to InaCom or its stockholders for monetary damages for breach of fiduciary duty as a director with respect to acts or omissions occurring on or after May 27, 1987. A director shall continue to be liable for (i) any breach of a director's duty of loyalty to InaCom or its stockholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) paying a dividend or approving a stock repurchase which would violate Section 174 of the General Corporation Law of the State of Delaware; or (iv) any transaction from which the director derived an improper personal benefit. The by-laws of InaCom provide for indemnification of InaCom's officers and directors against all expenses, liabilities or losses reasonably incurred or suffered by them, including liability arising under the Securities Act of 1933, to the extent legally permissible under section 145 of the General Corporation Law of the State of Delaware where any such person was, is, or is threatened to be made a party to or is involved in any action, suit or proceeding whether civil, criminal, administrative or investigative, by reason of the fact such person was serving InaCom in such capacity. Generally, under Delaware law, indemnification may only be available where an officer or director can establish that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of InaCom. Item 16. Exhibits. Exhibit 4.1 Specimen Common Stock Certificate 4.2 Indenture dated June 14, 1996 by and between the Company and First National Bank of Omaha, as trustee, and related Debenture, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 29, 1996. 4.3 Registration Rights Agreement dated June 14, 1996 between the Company and Dillon, Read & Co. Inc. 4.4 Restated Certificate of Incorporation of the Company, as amended, incorporated herein by reference to the Company's Current Report on Form 8-K dated March 30, 1993. 4.5 Bylaws of the Company, as amended to date, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 24, 1994. 5.1 Opinion of McGrath, North, Mullin & Kratz, P.C. 12 Statement re Computation of Ratios 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of McGrath, North, Mullin & Kratz, P.C. (included in Exhibit 5.1) 24 Powers of Attorney 25 Statement of Eligibility of Trustee II-2 Item 17. Undertakings. The undersigned registrant ("Registrant") hereby undertakes (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the Securities offered herein, and the offering of such Securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the Securities being registered which remain unsold at the termination of the offering. (d) That, for purposes of determining any liability under the Securities Act of 1933 (the "Securities Act"), each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (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. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to written agreements, Bylaw provisions or the Delaware Law, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant, InaCom Corp., a Delaware corporation, 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 Omaha, State of Nebraska, on the 10th day of September, 1996. INACOM CORP. /s/ BILL L. FAIRFIELD By:_____________________________ Bill L. Fairfield, President Pursuant to the requirements of the Securities Act of 1933 this Registration Statement has been signed below by the following persons in the capacities indicated on the 10th day of September, 1996. Signature Title /s/ BILL L. FAIRFIELD _____________________________________ President (Principal Bill L. Fairfield Executive Officer) and Director /s/ DAVID C. GUENTHNER _____________________________________ Executive Vice President David C. Guenthner and Chief Financial Officer (Principal Financial and Accounting Officer) Joseph Auerbach* Director W. Grant Gregory* Director Rick Inatome* Director Joseph Inatome* Director Gary Schwendiman* Director Durward B. Varner* Director * Bill L. Fairfield, by signing his name hereto, signs the Registration Statement on behalf of each of the persons indicated. A Power-of-Attorney authorizing Bill L. Fairfield to sign this Registration Statement on behalf of each of the indicated Directors of InaCom Corp. is filed herewith as Exhibit 24. By:/s/ BILL L. FAIRFIELD ________________________ Bill L. Fairfield Attorney-in-Fact II-4 EXHIBIT INDEX Exhibit Description 4.1 Specimen Common Stock Certificate 4.2 Indenture dated June 14, 1996 by and between the Company and First National Bank of Omaha, as trustee, and related Debenture, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 29, 1996. 4.3 Registration Rights Agreement dated June 14, 1996 between the Company and Dillon, Read & Co. Inc. 4.4 Restated Certificate of Incorporation of the Company, as amended, incorporated herein by reference to the Company's Current Report on Form 8-K dated March 30, 1993. 4.5 Bylaws of the Company, as amended to date, incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 24, 1994. 5.1 Opinion of McGrath, North, Mullin & Kratz, P.C. 12 Statement re Computation of Ratios 23.1 Consent of KPMG Peat Marwick LLP 23.2 Consent of McGrath, North, Mullin & Kratz, P.C. (included in Exhibit 5.1) 24 Powers of Attorney 25 Statement of Eligibility of Trustee - ----------- II-5 EX-4.1 2 SPECIMEN COMMON STOCK CERTIFICATE EXHIBIT 4.1 INACOM CORP. COMMON STOCK Incorporated under the laws of the State of Delaware No. Shares See Reverse For Certain Definitions CUSIP 45323G109 This Certifies that __________________________________________________ is the owner of Full paid and non-assessable shares, of the common stock, with a par value of $.10 per share of InaCom Corp.: transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to all provisions of the Certificate of Incorporation of the Corporation and all amendments thereto (copies of which are on file with the Transfer Agent) to all of which provisions each holder by acceptance of this Certificate assents. This Certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar. IN WITNESS WHEREOF the Corporation has caused this Certificate to be signed by the facsimile signature of its duly authorized officers and a facsimile of its corporate seal to be hereunto affixed. Dated Secretary President Countersigned and registered: First National Bank of Omaha (Omaha, Nebraska) Transfer Agent and Registrar, By_________________________________ Authorized Officer (Corporate Seal) The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants in common UNIF GIFT MIN ACT --______Custodian________ (Cust) (Minor) under Uniform Gifts to Minors Act _____________ (State) TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. __________________________________________________________________________ For value received ________________________ hereby sell, assign and transfer unto________________________________________________________ Please insert social security or other identifying number of assignee ___________________ __________________________________________________________________________ __________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee __________________________________________________________________________ __________________________________________________________________________ _________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint __________________________________________________________________________ Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises. Dated,______________________________ _______________________________ _______________________________ Signature of stockholder(s) Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. EX-4.3 3 REGISTRATION RIGHTS AGREEMENT Exhibit 4.3 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as of June 14, 1996 by and among InaCom Corp., a Delaware corporation (the "Company"), and Dillon, Read & Co. Inc. (the "Initial Purchaser") pursuant to the Purchase Agreement, dated as of June 14, 1996 (the "Purchase Agreement"), between the Company and the Initial Purchaser. In order to induce the Initial Purchaser to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Purchase Agreement. The Company agrees with the Initial Purchaser, (i) for its benefit as Initial Purchaser and (ii) for the benefit of the holders from time to time of the Debentures (including the Initial Purchaser) and the holders from time to time of the Common Stock issued upon conversion of the Debentures (each of the foregoing a "Holder" and together the "Holders"), as follows: 1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: Affiliate: "Affiliate" means, with respect to any specified person, (i) any other person directly or indirectly controlling or controlled by, or under direct or direct common control with, such specified person or (ii) any executive officer or director of such other person. For purposes of this definition, the term "control" (including the terms "controlling," "controlled by" and "under common control with") of a person means the possession, direct or indirect, of the power (whether or not exercised) to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. Common Stock: The shares of common stock, $.10 par value per share, of the Company and any other shares of common stock as may constitute "Common Stock" for purposes of the Indenture, in each case, as issuable or issued upon conversion of the Debentures. Conversion Price: At any time, the then-prevailing Conversion Price as defined in the Indenture. Damages Accrual Period: See Section 2(e) hereof. Debentures: The 6% Convertible Subordinated Debentures due June 15, 2006 of the Company being issued and sold pursuant to the Purchase Agreement and the Indenture. Deferral Period: See Section 2(d) hereof. Effectiveness Period: The period commencing with the date hereof and ending on the earlier of the date that is three years after the latest date of original issuance of the Debentures and the date that all Registrable Securities have ceased to be Registrable Securities. Event: See Section 2(e) hereof. Event Date: See Section 2(e) hereof. Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Filing Date: See Section 2(a) hereof. Holder: See the second paragraph of this Agreement. For the purpose of determining the number of Registrable Securities held by certain Holders hereunder at any time, Holders of Debentures shall be deemed to be Holders of the number of shares of Common Stock into which such Debentures are convertible at such time. Indenture: The Indenture, dated as of June 14, 1996, between the Company and First National Bank of Omaha, as trustee, pursuant to which the Debentures are being issued, as amended or supplemented from time to time in accordance with the terms hereof. Initial Shelf Registration: See Section 2(a) hereof. Losses: See Section 6(a) hereof. Managing Underwriters: The investment banking firm or firms that shall manage or co-manage an Underwritten Offering. Notice Holder: See Section 2(d)(i) hereof. Purchase Agreement: See the first paragraph of this Agreement. 2 Prospectus: The prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. Registrable Securities: The Debentures and the Common Stock of the Company into which the Debentures are convertible or converted, whether or not such Debentures have been converted, and any Common Stock issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such Debentures or Common Stock, (i) it is effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, (ii) it is saleable by the holder thereof pursuant to Rule 144(k) or (iii) it is sold to the public pursuant to Rule 144, and, as a result of the event or circumstance described in any of the foregoing clauses (i) through (iii), the legends with respect to transfer restrictions required under the Indenture are removed or removable in accordance with the terms of the Indenture. Registration Expenses: See Section 5 hereof. Registration Statement: Any registration statement of the Company which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. Rule 144: Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. Rule 144A: Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. Selling Period: See Section 2(d)(i) hereof. Shelf Registration: See Section 2(a) hereof. Special Counsel: Brobeck, Phleger & Harrison LLP, or such other successor counsel as shall be specified by the Holders of a majority of the Registerable Securities. 3 Subsequent Shelf Registration: See Section 2(b) hereof. Trustee: The Trustee under the Indenture. Underwritten Registration or Underwritten Offering: A registration in which securities of the Company are sold to an underwriter for reoffering to the public. 2. Shelf Registration. (a) Shelf Registration. The Company shall use its best efforts to prepare and file with the SEC, as soon as practicable but in any event on or prior to the date ninety (90) days following the first date of original issuance of the Debentures (the "Filing Date"), a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration") registering the resale from time to time by Holders thereof of all of the Registrable Securities (the "Initial Shelf Registration"). The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in the manner or manners reasonably designated by them (including, without limitation, one or more Underwritten Offerings). The Company shall use its best efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act as soon as practicable and to keep the Initial Shelf Registration continuously effective under the Securities Act until the earlier of the expiration of the Effectiveness Period or the date a Subsequent Shelf Registration, as defined below, covering all of the Registrable Securities has been declared effective under the Securities Act. (b) If the Initial Shelf Registration or any Subsequent Shelf Registration, as defined below, ceases to be effective pursuant to any order suspending the effectiveness thereof at any time during the Effectiveness Period (other than because all Registrable Securities registered thereunder shall have been sold or shall have ceased to be Registrable Securities), the Company shall use its best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend the Shelf Registration in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration covering all of the Registrable Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf Registration is filed, the Company shall use its best efforts to cause the Subsequent Shelf Registration to be declared effective as soon as practicable after such filing and to keep such Registration Statement continuously effective until the end of the Effectiveness Period. (c) The Company shall supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Initial Purchaser or by the Trustee on behalf of the Holders of 4 the Registrable Securities covered by such Registration Statement or by any Managing Underwriter of such Registrable Securities. (d) Each Holder of Registrable Securities agrees that if such Holder wishes to sell its Registrable Securities pursuant to a Shelf Registration and related Prospectus, it will do so only in accordance with this Section 2(d). Each Holder of Registrable Securities agrees to give written notice to the Company at least three Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration, which notice shall specify the date on which such Holder intends to begin such distribution. As soon as practicable after the date such notice is provided, and in any event within two Business Days after such date, the Company shall either: (i) (A) prepare and file with the Commission any required post-effective amendment to the Shelf Registration or any required supplement to the related Prospectus or any required supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (B) provide the Holders of the Registrable Securities who gave such notice copies of any documents filed pursuant to Section 2(d)(i)(A); and (C) inform each such Holder that the Company has complied with its obligations in Section 2(d)(i)(A) (or that, if the Company has filed a post-effective amendment to the Shelf Registration which has not yet been declared effective, the Company will notify each such Holder to that effect, will use its best efforts to secure the effectiveness of such post-effective amendment and will immediately notify each such Holder pursuant to Section 2(d)(i)(A) hereof when the amendment has become effective); each Holder who has given notice of intention to distribute such Holder's Registrable Securities in accordance with Section 2(d) hereof (a "Notice Holder") will sell all or any of such Registrable Securities pursuant to the Shelf Registration and related Prospectus only during the 45-day period commencing with the date on which the Company gives notice, pursuant to Section 2(d)(i)(C), that the Registration Statement and Prospectus may be used for such purpose (such 45-day period is referred to as a "Selling Period"). The Notice Holders will not sell any Restricted Securities pursuant to such Registration Statement or Prospectus after such Selling Period without giving a new notice of intention to sell pursuant to Section 2(d) hereof and receiving a further notice from the Company pursuant to Section 2(d)(i)(C) hereof. (ii) in the event (A) of the happening of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) hereof or (B) that, in the judgment of the Company, it is advisable to suspend use of the Prospectus for a discrete period of time due to pending material corporate developments or similar material events that have not yet been publicly disclosed and as to which the Company believes public disclosure 5 will be prejudicial to the Company, the Company shall deliver a certificate in writing, signed by its Chief Executive Officer or Chief Financial Officer, to the Notice Holders, the Special Counsel and the Managing Underwriters, if any, to the effect of the foregoing and, upon receipt of such certificate, each such Notice Holder's Selling Period will not commence until such Notice Holder's receipt of copies of the supplemented or amended Prospectus provided for in Section 2(d)(i)(A) hereof, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed, and the Selling Period will commence, as soon as practicable and, in the case of a pending development or event referred to in Section 2(d)(ii)(B) hereof, as soon as the earlier of (x) public disclosure of such pending material corporate development or similar material event or (y) in the judgment of the Company, public disclosure of such material corporate development or similar material event would not be prejudicial to the Company. Notwithstanding the foregoing, the Company shall not under any circumstances be entitled to exercise its right under this Section 2(d)(ii) to defer the commencement of a Selling Period for more than one (1) time not to exceed 45 days in any three (3) month period or for more than two (2) times not to exceed 90 days in the aggregate in any twelve (12) month period (a "Deferral Period"). (e) The parties hereto agree that the Holders of Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if (i) the Initial Shelf Registration has not been filed on or prior to the Filing Date, (ii) prior to the end of the Effectiveness Period, the SEC shall have issued a stop order suspending the effectiveness of the Shelf Registration or proceedings have been initiated with respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities Act, (iii) the aggregate number of days in any one Deferral Period exceeds the periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of Deferral Periods exceeds the number permitted pursuant to Section 2(d)(ii) hereof (each of the events of a type described in any of the foregoing clauses (i) through (iv) are individually referred to herein as an "Event," and the Filing Date in the case of clause (i), the date on which the effectiveness of the Shelf Registration has been suspended or proceedings with respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been commenced in the case of clause (ii), the date on which the duration of a Deferral Period exceeds the periods permitted by Section 2(d)(ii) hereof in the case of clause (iii), and the date of the commencement of a Deferral Period that causes the limit on the number of Deferral Periods under Section 2(d)(ii) hereof to be exceeded in the case of clause (iv), being referred to herein as an "Event Date"). Events shall be deemed to continue until the "Event Termination" which shall be the following dates with respect to the respective types of Events: the date the Initial Registration Statement is filed in the case of an Event of the type described in clause (i), the date that all stop orders suspending effectiveness of the Shelf Registration have been removed and the proceedings initiated with respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities Act have terminated, as the case may be, in the case of Events of the types described in clause (ii), termination of the Deferral 6 Period which caused the periods permitted by Section 2(d)(ii) to be exceeded in the case of the commencement of an Event of the type described in clause (iii), and termination of the Deferral Period the commencement of which caused the number of Deferral Periods permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type described in clause (iv). Accordingly, upon the occurrence of any Event and until such time as there are no Events which have occurred and are continuing (a "Damages Accrual Period"), commencing on the Event Date on which such Damages Accrual Period began, the Company agrees to pay, as liquidated damages, and not as a penalty, an additional amount (the "Liquidated Damages Amount"): (i) to each Holder of a Debenture that is a Notice Holder, accruing at a rate equal to one-half of one percent per annum (50 basis points) on the aggregate principal amount of Debentures held by such Notice Holder and (ii) to each Holder of Common Stock that is a Notice Holder, accruing at a rate equal to one-half of one percent per annum (50 basis points) calculated on an amount equal to the product of (x) the Conversion Price, times (y) the number of shares of Common Stock held by such Holder. Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to any Registrable Securities from and after the earlier of (x) the date such securities are no longer Registrable Securities, and (y) expiration of the Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events. The Company shall pay the liquidated damages due on any Debentures or Common Stock by depositing with the Trustee under the Indenture, in trust, for the benefit of the Holders of Debentures or Common Stock or Notice Holders, as the case may be, entitled thereto, at least one business day prior to the applicable payment date, sums sufficient to pay the liquidated damages accrued or accruing since the last preceding payment date through such payment date. For these purposes, subject to the proviso set forth in the next sentence, payment dates will be the same dates as the interest payment dates with respect to the Debentures under the Indenture. The Liquidated Damages Amount due shall be payable to the Holder of Registrable Securities entitled thereto on such payment date to the holders of record thereof on the applicable record date (corresponding to the record dates for interest payments on the Debentures), provided that accrued Liquidated Damages Amounts shall be paid on the applicable redemption date upon the redemption of any Debenture (to the extent accrued with respect to such Debenture) and, in the event of redemption of all Debentures, shall also be paid on such redemption date to the Holders of Common Stock (to the extent accrued with respect to such Common Stock). The Trustee shall be entitled, on behalf of the Holders of Debentures, Common Stock and Notice Holders, to seek any available remedy for the enforcement of this Agreement, including for the payment of such liquidated damages. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement with respect to which liquidated damages are expressly provided shall be such liquidated damages. Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement. 7 All of the Company's obligations set forth in this Section 2(e) which are outstanding with respect to any Registrable Securities at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been satisfied in full (notwithstanding termination of the Agreement pursuant to Section 8(o)). The parties hereto agree that the liquidated damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure of the Shelf Registration to be filed or declared effective or unavailable (absolutely or as a practical matter) for effecting resales of Registrable Securities, as the case may be, in accordance with the provisions hereof. 3. Registration Procedures. In connection with the Company's registration obligations under Section 2 hereof, the Company shall effect such registrations to permit the sale of the Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible: (a) Use its best efforts to prepare and file with the SEC a Registration Statement or Registration Statements on any appropriate form under the Securities Act available for the sale of the Registrable Securities by the Holders thereof in accordance with the intended method or methods of distribution thereof, and use its best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; provided, that before filing any such Registration Statement or Prospectus or any amendments or supplements thereto (other than documents that would be incorporated or deemed to be incorporated therein by reference and that the Company is required by applicable securities laws or stock exchange requirements to file) the Company shall furnish to the Initial Purchaser, the Special Counsel and the Managing Underwriters of such offering, if any, copies of all such documents proposed to be filed, which documents will be subject to the review of the Initial Purchaser, the Special Counsel and such Managing Underwriters, and the Company shall not file any such Registration Statement or amendment thereto or any Prospectus or any supplement thereto (other than such documents which, upon filing, would be incorporated or deemed to be incorporated by reference therein and that the Company is required by applicable securities laws or stock exchange requirements to file) to which the Holders of a majority of the Registrable Securities covered by such Registration Statement, the Initial Purchaser or the Special Counsel shall reasonably object in writing within two full Business Days. If any of the Registrable Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker that will administer the offering shall be selected by the Holders of a majority of the Registrable Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld). No Holder may participate in any underwritten registration unless such Holder (i) agrees to sell such Holder's Registrable Securities on the basis reasonably provided in any underwritten arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, 8 powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. (b) Use its best efforts to prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable period specified in Section 2; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so supplemented. (c) Notify the selling Holders, the Initial Purchaser, the Special Counsel and the Managing Underwriters, if any, promptly, and (if requested by any such person) confirm such notice in writing, (i) when a Prospectus, any Prospectus supplement, a Registration Statement or a post-effective amendment to a Registration Statement has been filed with the SEC, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the existence of any fact or happening of any event which makes any statement of a material fact in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or which would require the making of any changes in the Registration Statement or Prospectus in order that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Company's determination that a post-effective amendment to a Registration Statement would be appropriate. (d) Use its best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment. 9 (e) If reasonably requested by the Initial Purchaser, the Special Counsel, the Managing Underwriters, if any, or the Holders of a majority of the Registrable Securities being sold, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to a Registration Statement such information as the Initial Purchaser, the Special Counsel, the Managing Underwriters, if any, or such Holders, in connection with any offering of Registrable Securities, agree should be included therein as required by applicable law, and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment; provided, that the Company shall not be required to take any actions under this Section 3(e) that are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law. (f) Furnish to each selling Holder, the Special Counsel and the Initial Purchaser, and each Managing Underwriter, if any, without charge, at least one conformed copy of the Registration Statement or Statements and any amendment thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits (unless requested in writing by such Holder, counsel, Initial Purchaser or underwriter). (g) Deliver to each selling Holder, the Special Counsel and the Initial Purchaser and each Managing Underwriter, if any, in connection with any offering of Registrable Securities, without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such persons may reasonably request; and the Company hereby consents to the use of such Prospectus or each amendment or supplement thereto by each of the selling Holders of Registrable Securities and the Underwriters, if any, in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto. (h) Prior to any public offering of Registrable Securities, use its best efforts to register or qualify or cooperate with the selling Holders, the Managing Underwriters, if any, and the Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder or Managing Underwriter reasonably requests in writing; keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject. 10 (i) Use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities within the United States, except as may be required solely as a consequence of the nature of such selling Holder, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the selling Holder or Holders thereof or the Managing Underwriters, if any, to consummate the disposition of such Registrable Securities. (j) During any Selling Period (other than during a Deferral Period), immediately upon the existence of any fact or the occurrence of any event as a result of which a Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or a Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, promptly prepare and file a post-effective amendment to each Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document (such as a Current Report on Form 8-K) that would be incorporated by reference into the Registration Statement so that the Registration Statement shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and so that the Prospectus will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Registration Statement, use its best efforts to cause it to become effective as soon as practicable. (k) Enter into such agreements (including, in the event of an Underwritten Offering, an underwriting agreement in form, scope and substance as is customary in Underwritten Offerings) and take all such other actions in connection therewith (including, in the event of an underwritten offering, those reasonably requested by the Managing Underwriters, if any, or the Holders of a majority of the Registrable Securities being sold) in order to expedite or facilitate the disposition of such Registrable Securities and in such connection, whether or not an underwriting agreement is entered into, and if the registration is an underwritten registration, (i) make such representations and warranties, subject to the Company's ability to do so, to the Holders of such Registrable Securities and the underwriters with respect to the business of the Company and its subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested; (ii) use its best efforts to obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be 11 reasonably satisfactory to the Managing Underwriters, if any, Special Counsel and the Holders of a majority of the Registrable Securities being sold) addressed to each of the underwriters covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Special Counsel and Managing Underwriters; (iii) use its best efforts to obtain "cold comfort" letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other certified public accountants of any subsidiary of the Company or any business acquired or to be acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each of the Managing Underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with Underwritten Offerings; and (iv) deliver such documents and certificates as may be reasonably requested by the Holders of a majority of the Registrable Securities being sold, the Special Counsel and the Managing Underwriters, if any, to evidence the continued validity of the representations and warranties of the Company and its subsidiaries made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement as and to the extent required thereunder. (l) If requested in connection with a disposition of Registrable Securities pursuant to a Registration Statement, make available for inspection by a representative of the Holders of Registrable Securities being sold, any Managing Underwriter participating in any disposition of Registrable Securities, if any, and any attorney or accountant retained by such selling Holders or underwriter, financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the executive officers, directors and employees of the Company and its subsidiaries to supply all information reasonably requested by any such representative, Managing Underwriter, attorney or accountant in connection with such disposition; subject to reasonable assurances by each such person that such information will only be used in connection with matters relating to such Registration Statement. (m) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering, and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (n) Cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities 12 to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the Holders may request. (o) Provide a CUSIP number for all Registrable Securities not later than the effective date of the Registration Statement and provide the Trustee under the Indenture and the transfer agent for the Registrable Securities with printed certificates for the Registrable Securities which are in a form eligible for deposit with the Depository Trust Company. (p) Use its best efforts to cause all Registrable Securities that are Common Stock and are covered by the Registration Statement to be listed on each securities exchange or quotation system on which any of the Company's Common Stock is then listed no later than the date the Registration Statement is declared effective and, in connection therewith, to the extent applicable, to make such filings under the Exchange Act (e.g., the filing of a Registration Statement on Form 8-A) and to have such filings declared effective thereunder. (q) Cooperate and assist in any filings required to be made with the National Association of Securities Dealers, Inc. 4. Holder's Obligations. Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with the notice required pursuant to Section 2(d) hereof and, promptly after the Company's request, such other information regarding such Holder and the distribution of such Registrable Securities as may be required to be included in the Registration or the Prospectus or the Company may from time to time reasonably request. The Company may exclude from such registration the Registrable Securities of any Holder who does not furnish such information provided above for so long as such information is not so furnished. Each Holder of Registrable Securities as to which any Registration Statement is being effected agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Holder not misleading. Any sale of any Registrable Securities by any Holder shall constitute a representation and warranty by such Holder that the information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement of a material fact relating to such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact relating to such Holder or its plan of distribution necessary to make the statements in such Prospectus, in light of the circumstances under which they were made, not misleading. 5. Registration Expenses. Except as otherwise provided herein, all fees and expenses incident to the Company's performance of or compliance with this Agreement 13 shall be borne by the Company whether or not any of the Registration Statements become effective. Such fees and expenses shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (y) of compliance with federal securities or Blue Sky laws (including fees and disbursements of Special Counsel in connection with Blue Sky qualifications of the Registrable Securities laws of such jurisdictions as the Managing Underwriters, if any, or Holders of a majority of the Registrable Securities being sold may designate, which fees and expenses, together with the reasonable fees and disbursements of its counsel in connection with the state qualifications pursuant to the Purchase Agreement, shall not exceed $10,000), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the Special Counsel or the Holders of a majority of the Registrable Securities included in any Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and disbursements of counsel for the Company in connection with the Shelf Registration, (v) fees and disbursements of all independent certified public accountants referred to in Section 3(k)(iii) hereof (including the expenses of any special audit and "cold comfort" letters required by or incident to such performance) and (vi) Securities Act liability insurance obtained by the Company in its sole discretion. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Company are then listed and the fees and expenses of any person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each seller of Registrable Securities shall pay (i) all registration expenses to the extent that the Company is prohibited by applicable Blue Sky laws from paying for or on behalf of such seller of Registrable Securities, (ii) all underwriting discounts and commissions with respect to Registrable Securities sold by such seller, and (iii) fees and expenses of special counsel except as provided in Section 5(i) above. 6. Indemnification. (a) Indemnification by the Company. The Company shall indemnify and hold harmless each Holder and each person, if any, who controls any Holder (within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act) from and against all losses, liabilities, claims, damages and expenses (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (collectively, "Losses"), arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Losses arise out of or are 14 based upon the information relating to any Holder furnished to the Company in writing by such Holder expressly for use therein; provided, that the Company shall not be liable to any Holder of Registrable Securities (or any person controlling such Holder) to the extent that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary prospectus if either (A)(i) such Holder failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by such Holder to the person asserting the claim from which such Losses arise and (ii) the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (B)(x) such untrue statement or alleged untrue statement, omission or alleged omission is corrected in an amendment or supplement to the Prospectus and (y) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such Holder thereafter fails to deliver such Prospectus as so amended or supplemented, with or prior to the delivery of written confirmation of the sale of a Registrable Security to the person asserting the claim from which such Losses arise. The Company shall also indemnify each underwriter and each person who controls such person (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) to the same extent and with the same limitations as provided above with respect to the indemnification of the Holders of Registrable Securities. (b) Indemnification by Holder of Registrable Securities. Each Holder agrees severally and not jointly to indemnify and hold harmless the Company, its directors, its officers who sign a Registration Statement, and each person, if any, who controls the Company (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act), from and against all Losses arising out of or based upon any untrue statement of a material fact contained in any Registration Statement, Prospectus or preliminary prospectus or arising out of or based upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information relating to such Holder so furnished in writing by such Holder to the Company expressly for use in such Registration Statement or Prospectus. In no event shall the liability of any selling Holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. (c) Conduct of Indemnification Proceedings. In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any 15 indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (a) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Holders and all persons, if any, who control any Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and (b) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign a Registration Statement and each person, if any, who controls the Company within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) Contribution. If the indemnification provided for in this Section 6 is unavailable to an indemnified party under Section 6(a) or 6(b) hereof in respect of any Losses or is insufficient to hold such indemnified party harmless, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses, (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the initial placement (before deducting expenses) of the Debentures pursuant to the Purchase Agreement. Benefits received by the Initial Purchaser shall be deemed to be equal to the total purchase discounts and commissions received by them pursuant to the Purchase Agreement and benefits received by any other Holders shall be deemed to be equal to the 16 value of the Debentures and/or Common Stock registered under the Securities Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. The relative fault of the Holders on the one hand and the Company on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Holders or by the Company and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Holders' respective obligations to contribute pursuant to this paragraph are several in proportion to the respective number of Registrable Securities they have sold pursuant to a Registration Statement, and not joint. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method or allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the Losses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding this Section 6(d), an indemnifying party that is a selling Holder of Registrable Securities shall not be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by such indemnifying party and distributed to the public were offered to the public exceeds the amount of any damages which such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The indemnity, contribution and expense reimbursement obligations of the Company hereunder shall be in addition to any liability the Company may otherwise have hereunder, under the Purchase Agreement or otherwise. The provisions of this Section 6 shall survive so long as Registrable Securities remain outstanding, notwithstanding any transfer of the Registrable Securities by any Holder or any termination of this Agreement. The indemnity and contribution provisions contained in this Section 6 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Holder or any person controlling any Holder, or the Company, its officers or directors or any person controlling the Company and (iii) the sale of any Registrable Securities by any Holder. 17 7. Information Requirements. (a) The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act, and if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Registrable Securities, make publicly available other information so long as necessary to permit sales pursuant to Rule 144 and Rule 144A under the Securities Act. The Company further covenants that it will cooperate with any Holder of Registrable Securities and take such further reasonable action as any Holder of Registrable Securities may reasonably request (including, without limitation making such reasonable representations as any such Holder may reasonably request), all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 and Rule 144A under the Securities Act. Upon the request of any Holder of Registrable Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such filing requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities under any section of the Exchange Act. (b) The Company shall use its best efforts to file the reports required to be filed by it under the Exchange Act and shall use its best efforts to comply with all other requirements set forth in the instructions to Form S-3 in order to allow the Company to be eligible to file registration statements on Form S-3. 8. Miscellaneous. (a) Remedies. Subject to Section 2(e) hereof, in the event of a breach by the Company of its obligations under this Agreement, each Holder of Registrable Securities, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. (b) No Conflicting Agreements. The Company has not, as of the date hereof, and shall not, on or after the date of this Agreement, enter into any agreement with respect to its securities which conflicts with the rights granted to the Holders of Registrable Securities in this Agreement. The Company represents and warrants that the rights granted to the Holders of Registrable Securities hereunder do not in any way conflict with the rights granted to the Holders of the Company's securities under any other agreements. 18 (c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders of Registrable Securities may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders; provided, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier or (iii) one business day after being deposited with a reputable next-day courier, postage prepaid, to the parties as follows: (a) if to a Holder of Registrable Securities, at the most current address given by such Holder to the Company in accordance with the provisions of Section 8(e); (b) if to the Company, to: InaCom Corp. 10810 Farnam Drive Omaha, NE 68154 Attention: Chief Financial Officer Telecopy No.: (402) 392-3619 with a copy to: McGrath, North, Mullin & Kratz, P.C. 1400 One Central Park Plaza Omaha, NE 68102 Attention: David L. Hefflinger Telecopy No.: (402) 341-0216 19 (c) if to the Initial Purchaser, to: Dillon, Read & Co. Inc. 535 Madison Avenue New York, New York 10022 Attention: Syndicate Department Telecopy No.: (212) 486-6233 (d) if to the Special Counsel, to: Brobeck, Phleger & Harrison LLP 1301 Avenue of the Americas New York, NY 10019 Attention: Alexander D. Lynch Telecopy No.: (212) 586-7878 or to such other address as such person may have furnished to the other persons identified in this Section 8(d) in writing in accordance herewith. (e) Owner of Registrable Securities. The Company will maintain, or will cause the Trustee and/or its registrar and transfer agent to maintain, a register with respect to the Registrable Securities in which all transfers of Registrable Securities of which the Company has received notice will be recorded. The Company may deem and treat the person in whose name Registrable Securities are registered in such register of the Company as the owner thereof for all purposes, including, without limitation, the giving of notices under this Agreement. (f) Approval of Holders. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405 under the Securities Act) (other than the Initial Purchaser or subsequent Holders of Registrable Securities if such subsequent Holders are deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (g) Successors and Assigns. Any person who purchases any Registerable Securities from the Initial Purchaser shall be deemed, for purposes of this Agreement, to be an assignee of the Initial Purchaser. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties and shall inure to the benefit of and be binding upon each Holder of any Registrable Securities. (h) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so 20 executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement. (i) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. (k) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, illegal, void or unenforceable. (l) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company to Holders of the Registrable Securities sold pursuant to the Purchase Agreement. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Company to the Holders of the Registrable Securities. This Agreement supersedes all prior agreements and understandings among the parties with respect to such registration rights. (m) Attorneys' Fees. In any action or proceeding brought to enforce provision of this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party, as determined by the court, shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. (n) Further Assurances. Each of the parties hereto shall use all best efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things reasonably necessary, proper or advisable under applicable law, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the other documents contemplated hereby and consummate and make effective the transactions contemplated hereby. 21 (o) Termination. This Agreement and the obligations of the parties hereunder shall terminate upon the end of the Effectiveness Period, except for any liabilities or obligations under Sections 4, 5 or 6 hereof and the obligations to make payments of and provide for liquidated damages under Section 2(e) hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each which shall remain in effect in accordance with their terms. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. INACOM CORP. By: /s/ BILL L. FAIRFIELD Name: Bill L. Fairfield Title: President and C.E.O. Accepted as of the date first above written: DILLON, READ & CO. INC. By: /s/ JOHN M. BOYLE Name: John M. Boyle Title: Vice President 22 EX-5.1 4 LEGAL OPINION Exhibit 5.1 McGrath, North, Mullin & Kratz, P.C. Suite 1400 One Central Park Plaza 222 South Fifteenth Street Omaha, Nebraska 68102 (402) 341-3070 September 10, 1996 TO THE BOARD OF DIRECTORS OF INACOM CORP. Gentlemen: In connection with the registration under the Securities Act of 1933, as amended, of $55,250,000 6% Convertible Subordinated Debentures due June 15, 2006 (the "Debentures") and the 2,302,083 shares of common stock, $.10 par value (the "Common Shares"), of InaCom Corp., a Delaware corporation ("InaCom"), with respect to the proposed sale by certain selling holders thereof from time to time, we have examined such corporate records and other documents including the registration statement on Form S-3, to be filed with the Securities and Exchange Commission, relating to such matters of law as we have deemed necessary for this opinion. Based on such examination and subject to the proceedings as are now being contemplated being duly taken and completed by you prior to the issuance of the Company shares, we advise you that in our opinion: 1. InaCom is a corporation duly organized and existing under the laws of the state of Delaware. 2. All necessary corporate action on the part of InaCom has been taken to authorize the registration of the Debentures and the Company Shares by InaCom. 3. The Debentures and the Common Shares are duly authorized, legally issued, fully paid and nonassessable. We consent to the filing of this opinion as an exhibit to the Registration Statement. Yours very truly, McGrath, North, Mullin & Kratz, P.C. By /s/ DAVID L. HEFFLINGER ----------------------- David L. Hefflinger EX-12 5 STATEMENT RE COMPUTATION OF RATIOS Exhibit 12 Inacom Corp. Computation of Ratio of Earnings to Fixed Charges ================================================================================================================================== Year Ended December Twenty-Six Weeks Ended - ---------------------------------------------------------------------------------------------------------------------------------- 1991 1992 1993 1994 1995 June 24, 1995 June 29, 1996 - ---------------------------------------------------------------------------------------------------------------------------------- Earnings Before Taxes 5,700 17,959 19,693 (3,750) 19,833 7,947 12,566 - ---------------------------------------------------------------------------------------------------------------------------------- Fixed Charges - ---------------------------------------------------------------------------------------------------------------------------------- Interest 4,146 7,964 8,596 12,055 14,634 6,480 9,919 - ---------------------------------------------------------------------------------------------------------------------------------- Rents & Leases 1,292 1,770 2,345 2,851 3,266 1,562 1,844 - ---------------------------------------------------------------------------------------------------------------------------------- Total Fixed 5,438 9,734 10,941 14,906 17,900 8,042 11,763 Charges - ---------------------------------------------------------------------------------------------------------------------------------- Adjusted Earnings 11,138 27,693 30,634 11,156 37,733 15,989 24,329 - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Ratio of Earnings 2.05 2.84 2.80 0.75 2.11 1.99 2.07 to Fixed Charges ==================================================================================================================================
EX-23.1 6 ACCOUNTANTS' CONSENT KPMG Peat Marwick LLP Two Central Park Plaza 233 South 13th Street Suite 1501 Suite 1600 Omaha, NE 68101 Lincoln, NE Telephone 402 348-1450 Telephone 402 476-1216 Telefax 402 348-0152 Telefax 402 476-1944 ACCOUNTANTS' CONSENT The Board of Directors InaCom Corp.: We consent to the use of our reports incorporated herein by reference and to the reference to our Firm under the heading "Experts" in the Prospectus. KPMG Peat Marwick LLP /s/ KPMG Peat Marwick LLP Omaha, Nebraska September 9, 1996 EX-24 7 POWERS OF ATTORNEY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ DURWARD B. VARNER --------------------- Durward B. Varner POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ W. GRANT GREGORY --------------------- W. Grant Gregory POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ RICK INATOME --------------------- Rick Inatome POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ JOSEPH AUERBACH --------------------- Joseph Auerbach POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ JOSEPH INATOME --------------------- Joseph Inatome POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of InaCom Corp. constitutes and appoints each of Bill L. Fairfield and David C. Guenthner as his true and lawful attorney-in-fact and agent, with each having full power of substitution and resubstitution, for him and in his name, place and stead in any and all capacities, to execute a registration statement on Form S-3 for the registration under the Securities Act of 1933 of $55,250,000 of 6% Convertible Subordinated Debentures due June 15, 2006 and upon conversion of the Debentures and, as adjusted under certain circumstances, such additional shares of InaCom Common Stock as may be issuable upon conversion of the Debentures, and any and all amendments and post-effective amendments and supplements to the registration statement and any and all instruments necessary or incidental in connection therewith, and to file the same with the Securities and Exchange Commission, granting unto each of such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal this 22nd day of August, 1996. /s/ BILL L. FAIRFIELD --------------------- Bill L. Fairfield EX-25 8 STATEMENT OF ELIGIBILITY OF TRUSTEE SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 ------------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------------------------------------------ FIRST NATIONAL BANK OF OMAHA (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 47-0259043 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL CENTER, OMAHA, NEBRASKA 68102-1596 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) FIRST NATIONAL BANK OF OMAHA ONE FIRST NATIONAL CENTER OMAHA, NEBRASKA 68102-1596 ATTN: JAMES MORAN (402)633-7404 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) -------------------------------------------- INACOM CORP. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 47-0681813 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 10810 FARNAM DRIVE 68154 OMAHA, NEBRASKA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 6% CONVERTIBLE SUBORDINATED DEBENTURES (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING ------------------- INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of Currency, Washington, D.C., Federal Deposit Insurance Corporation, Washington, D.C., The Board of governors of the Federal Reserve System, Washington, D.C. (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR ----------------------------- IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A ---------------- PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect. 2. A copy of the certificate of authority of the trustee to commence business. 3. A copy of the authorization of the trustee to exercise corporate trust powers. 4. A copy of the existing by-laws of the trustee. 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. 2 Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, First National Bank of Omaha, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Omaha and State of Nebraska, on the 9th day of September, 1996. FIRST NATIONAL BANK OF OMAHA, TRUSTEE BY /S/ JOHN E. LENIHAN JOHN E. LENIHAN TRUST OFFICER 3 THE AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF FIRST NATIONAL BANK OF OMAHA FIRST: The title of this Association, which shall carry on the business of banking under the laws of the United States shall be FIRST NATIONAL BANK OF OMAHA. SECOND: The place where the main banking house or office of this Association shall be located, its operations of discount and deposit carried on, and its general business conducted, shall be Omaha, County of Douglas and State of Nebraska. THIRD: The Board of Directors of this Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the votes to which all of its shareholders are at the time entitled to vote at any annual or special meeting thereof. Each Director shall own stock of the Association or of a holding company controlling the Association, with an aggregate par, fair market or equity value of not less than $1,000, as of either (i) the date of purchase, (ii) the date the person becomes a Director, or (iii) the date of that person's most recent election to the Board of Directors, whichever is more recent. A majority of the Board of Directors shall be necessary to constitute a quorum for the transaction of business. The Board of Directors, in any year between Annual Meetings of shareholders, may by the vote of a majority of the full Board increase the number of Directors by not more than two, and may appoint Directors to fill the vacancies thereby created. FOURTH: The regular Annual Meeting of the shareholders of this Association shall be held at its main banking house or other convenient place duly authorized by the Board of Directors on such day of each year as is specified therefor in the By-Laws, at which meeting a Board of Directors shall be elected; but, if no such election shall be held on that day, it may be held on any subsequent day, in accordance with the provisions of the banking laws of the United States. FIFTH: The amount of capital stock of this Association shall be FIVE MILLION THREE HUNDRED THIRTY THOUSAND NINETY AND NO/100 DOLLARS ($5,330,090.00), divided into One Million Sixty-Six Thousand Eighteen (1,066,018) shares of common stock of the par value of FIVE AND NO/100 DOLLARS ($5.00) each; but said capital stock may be increased or decreased from time to time in accordance with the provisions of the laws of the United States. If the capital stock is increased by the sale of 4 additional shares thereof, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of said capital stock owned by him at the time the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. The Board of Directors shall have the power to prescribe a reasonable period of time within which the preemptive rights to subscribe to the new shares of capital stock must be exercised. If the capital stock is increased by a stock dividend, each shareholder shall be entitled to his proportionate amount of such increase in accordance with the number of shares of capital stock owned by him at the time the increase is authorized by the shareholder, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized. SIXTH: There shall be an Executive Committee consisting of not less than three nor more than five Directors elected by the shareholders at the election of Directors. The Executive Committee shall have authority to elect and dismiss officers, fix their salaries, define their duties and the manner in which the affairs of the Association shall be conducted. The Executive Committee shall have power to authorize the seal of the Association to be affixed to all papers which may require it. Any vacancy in the Executive Committee shall be filled by the remaining members of the Executive Committee until the next election by the shareholders. SEVENTH: The Board of Directors shall have the power to change the location of the main office to any other place within the limits of Omaha, without the approval of the shareholders but subject to the approval of the Comptroller of the Currency; and shall have the power to establish or change the location of any branch or branches of the Association to any other location, without the approval of the shareholders but subject to the approval of the Comptroller of the Currency. EIGHTH: This Association shall have succession from the date of its organization certificate until such time as it be dissolved by the act of its shareholders in accordance with the provisions of the banking laws of the United States, or until its franchise becomes forfeited by reason of violation of law, or until its affairs be placed in the hands of a receiver and finally wound up by him. NINTH: The Board of Directors of this Association, or any three or more shareholders owning, in the aggregate, not less than ten per centum of the stock of this Association, may call a special meeting of shareholders at any time: Provided, however, that, unless otherwise provided by law, not less than ten days prior to 5 the date fixed for any such meeting, a notice of the time, place and purpose of the meeting shall be given by first-class mail, postage prepaid, to all shareholders of record of this Association at their respective addresses as shown upon the books of the Association. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the shareholders owning at least a majority of the stock of this Association, subject to the provisions of the banking laws of the United States. The notice of any shareholders' meeting, at which an Amendment to the Articles of Association of this Association is to be considered, shall be given as herein above set forth. TENTH: Any person may be indemnified or reimbursed by the Association for reasonable expenses actually incurred by him in connection with any suit or proceeding to which he is made a party by reason of his being or having been a director, officer or employee of the Association: PROVIDED, HOWEVER, that no person shall be so indemnified or reimbursed in relation to any action, suit or proceeding in which he shall finally be adjudged guilty of, or found liable for, gross negligence, willful misconduct or criminal acts: and PROVIDED, FURTHER that no person shall be so indemnified or reimbursed in relation to any action, suit or proceeding which has been made the subject of a compromise settlement, except with the approval of the holders of record of a majority of the outstanding shares of said Association. The foregoing right of indemnification or reimbursement shall not be exclusive of other rights to which such person may be entitled as a matter of law. RESTATED to reflect amendments through November 28, 1995. 6 TREASURY DEPARTMENT ) Office of ) ss: Comptroller of the Currency ) I, Dean E. Miller, Deputy Comptroller for Trust and Securities, do hereby certify that the records in this Office indicate that on May 5, 1919, the Federal Reserve Board (now the Board of Governors of the Federal Reserve System) granted to the "First National Bank of Omaha", Omaha, Nebraska the right to act, when not in contravention of state or local law, as trustee, executor, administrator, and registrar of stocks and bonds. On February 14, 1929 the bank was granted the authority to act as guardian of estates, assignee, receiver, committee of estates of lunatics or in any other fiduciary capacity in which state banks, trust companies or other corporations which come into competition with national banks are permitted to act under the laws of the State of Nebraska. The authority granted remains in full force and effect. Authority to grant trust powers to national banks was, under the provisions of the Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, transferred from the Board of Governors of the Federal Reserve System to the Comptroller of the Currency. Section 2 of the Act states in Part: "Nothing contained in this Act shall be deemed to affect or curtail the right of any national bank to act in fiduciary capacities under a permit granted before the date of enactment of this Act by the Board of Governors of the Federal Reserve System, nor to affect the validity of any transactions entered into at any time by any national bank pursuant to such permit. . ." IN TESTIMONY WHEREOF, I have hereunto subscribed my name and caused the seal of Office of the Comptroller of the Currency to be affixed to these presents at the Treasury Department, in the City of Washington and District of Columbia this twenty-ninth day of June 1983. /s/ DEAN E. MILLER Dean E. Miller Deputy Comptroller for Trust and Securities 7 RESTATED BY-LAWS OF FIRST NATIONAL BANK OF OMAHA I. MEETINGS OF SHAREHOLDERS ------------------------ The regular annual meeting of the shareholders of this Bank for the election of Directors and the transaction of such other business as may properly come before said meeting, shall be held on such day during the first one hundred eighty days (180 days) of the year as the Directors may select and designate. It shall be the duty of the Board of Directors to appoint three Directors or employees of the Bank to be judges of said election, who shall hold and conduct the same and who shall, after the election has been held, notify under their hands the Cashier of the Bank of the result thereof and the names of the Directors elect. Notice of such meeting shall be given in such manner as may be required by the laws of the United States pertaining to national banks or by the Regulations of the Comptroller of the Currency. If for any cause the annual election of directors is not held on the date fixed in these Bylaws, the directors in office shall order an election to be held on some other day, of which special election notice shall be given in accordance with the requirements of Section 5149, United States Revised Statutes, judges appointed, returns made and recorded, and the directors elect notified according to the foregoing provisions of these Bylaws. II. OFFICERS -------- The officers of the Bank shall be a President and a Cashier and such other officers as from time to time may appear to the Executive Committee to be required or desirable for the conduct of the affairs of the Bank, which officers shall be appointed by the Executive Committee and by which Committee their several duties shall be prescribed. III. CORPORATE SEAL -------------- The following is an impression of the Seal adopted by the Board of Directors of this Bank. IV. TRANSFERS AND CONVEYANCES ------------------------- All transfers and conveyances of real estate and all contracts and leases shall be made by the Association under Seal in accordance with the orders of the Board of Directors and shall be signed by the President or any member of the Executive Committee and attested by the Cashier, or any operations officer. All assignments of mortgages and trust deeds, and all releases of mortgages and deeds of reconveyance shall be executed under the Seal of the Association by any Member of the Executive Committee, any Executive Vice President, Senior Vice President, or Vice President, or any person so designated by resolution, and shall be attested to by any Member of the Executive Committee, any Executive Vice President, Senior Vice President, or Vice President, or any person so designated by resolution. V. INCREASE OF STOCK ----------------- Whenever an increase of stock shall be determined upon in accordance with law, it shall be the duty of the Board of Directors to notify all shareholders of the same and to cause a subscription to be opened for such increase of capital. In the increase of capital, each shareholder shall have the privilege of subscribing for such number of shares of the new stock as he may be entitled to subscribe for according to his existing stock in the Bank. If any shareholder shall fail to subscribe for the amount of stock to which he may be entitled, the Board of Directors may determine what disposition shall be made of the privilege of subscribing for the unsubscribed stock. VI. MEETINGS OF DIRECTORS --------------------- The regular meeting of the Board of Directors shall be held on the third Wednesday of each month. When any regular meeting of the Board of Directors falls upon a holiday, meetings shall be held on the following day. Special meetings may be called by the President, any member of the Executive Committee, or at the request of a majority of the Board of Directors. A majority of all Directors is required to constitute a quorum to do business. Should there be no quorum at any regular or special meeting, the members present may adjourn from day to day until a quorum is in attendance. In the absence of a quorum no business shall be transacted. VII. STOCK AND STOCK CERTIFICATES ---------------------------- The stock of the Bank shall be assignable and transferable only on the books of the Bank, subject to the restrictions and provisions of the laws of the United States pertaining to national banks. A transfer book shall be provided in which all assignments and transfers of stock shall be made. VIII. COMMITTEES ---------- The Executive Committee may appoint from time to time such Committees of one or more Directors for such purposes and with such powers as the Executive Committee may determine. IX. AMENDMENTS TO BYLAWS -------------------- These Bylaws may be changed or amended by the vote of a majority of the members of the Board of Directors at any regular meeting or at any special meeting called for that purpose. X. EXECUTIVE COMMITTEE ------------------- The Executive Committee shall have authority to elect and dismiss officers, fix their salaries, define their duties, and the manner in which the affairs of the Association shall be conducted. The Executive Committee shall have power to authorize the seal of the Association to be affixed to all papers which may require it. XI. INDEMNIFICATION --------------- Section 1. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation, as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit, or proceeding 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 corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. Section 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit 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 corporation, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable for any negligence or misconduct in the performance of his or her duty to the corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Section 3. To the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Sections 1 and 2 of this Article, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection therewith. Section 4. Any indemnification under Sections 1 and 2 of this Article, unless ordered by a court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard or conduct set forth in Sections 1 and 2 of this Article. Such determination shall be made by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit, or proceeding, or if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the shareholders. Section 5. Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the corporation in advance of the final disposition of such action, suit, or proceeding as authorized in the manner provided in Section 4 of this Article upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the corporation as authorized in this Article. Section 6. Nothing contained in this Article shall limit the corporation's ability to reimburse expenses incurred by a director, officer, employee or agent of the corporation in connection with his or her appearance as a witness in a proceeding at a time when he or she has not been made a named defendant or respondent in the proceeding. Section 7. Any indemnification of a director in accordance with this Article, including any payment or reimbursement of expenses, shall be reported in writing to the shareholders with the notice of the next shareholders' meeting or prior to such meeting. RESTATED to reflect amendments through April 17, 1996. THE CONSENT OF THE TRUSTEE REQUIRED BY 321(b) OF THE ACT First National Bank of Omaha, the Trustee executing the statement of eligibility and qualification to which this Exhibit is attached, does hereby consent that reports of examinations of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor in accordance with the provisions of 321(b) of the Trust Indenture Act of 1939. FIRST NATIONAL BANK OF OMAHA September 9, 1996 BY: /s/ JOHN E. LENIHAN - ----------------- -------------------- Date John E. Lenihan Trust Officer Legal Title of Bank: FIRST NATIONAL BANK OF OMAHA Call Date: 6/30/96 ST-BK: 31-2730 FFIEC 032 Address: 16TH AND DODGE STREETS Page RC-1 City, State Zip: OMAHA, NE 68102 FDIC Certificate No.: 05452 Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for June 30, 1996 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding as of the last business day of the quarter. Schedule RC--Balance Sheet C300 Dollar Amounts in Thousands................ RCON Bil Mil Thou - ---------------------------------------------------------------------------------------------------------------------------------- ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin(1)........................... 0081 203,852 1.a. b. Interest-bearing balances(2).................................................... 0071 0 1.b. 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A)...................... 1754 401,648 2.a. b. Available-for-sale securities (from Schedule RC-B, column D).................... 1773 100,846 2.b. 3. Federal funds sold and securities purchased under agreements to resell: a. Federal funds sold ........................................... 0276 33,090 3.a. b. Securities purchased under agreements to resell................................. 0277 0 3.b. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C) RCON 2122 2,153,873..... 4.a. b. LESS: Allowance for loan and lease losses RCON 3123 42,208..... 4.b. c. LESS: Allocated transfer risk reserve RCON 3128 0..... 4.c. d. Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b and 4.c).................................. 2125 2,111,665 4.d. 5. Trading assets (from Schedule RC-D)...................................................... 3545 0 5. 6. Premises and fixed assets (including capitalized leases)................................. 2145 67,387 6. 7. Other real estate owned (from Schedule RC-M)............................................. 2150 0 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)......................................................................... 2130 4,233 8. 9. Customers' liability to this bank on acceptances outstanding............................. 2155 329 9. 10. Intangible assets (from Schedule RC-M)................................................... 2143 0 10. 11. Other assets (from Schedule RC-F)........................................................ 2160 86,974 11. 12. Total assets (sum of items 1 through 11)................................................. 2170 3,010,024 12. - ----------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. Legal Title of Bank: FIRST NATIONAL BANK OF OMAHA Call Date: 6/30/96 ST-BK: 31-2730 FFIEC 032 Address: 16TH AND DODGE STREETS Page RC-2 City, State Zip: OMAHA, NE 68102 FDIC Certificate No.: 05452 Schedule RC--Continued Dollar Amounts in Thousands................ RCON Bil Mil Thou - ---------------------------------------------------------------------------------------------------------------------------------- LIABILITIES 13. Deposits a. In domestic offices (sum of totals of columns A and C from Schedule RC-E)....... 2200 2,601,589 13.a. (1) Noninterest-bearing(1)...........RCON 6631 387,796............. 13.a.(1) (2) Interest-bearing.................RCON 6636 2,213,793............. 13.a.(2) b. In foreign offices, Edge and Agreement subsidiaries, and IBFs................... (1) Noninterest-bearing......................................................... (2) Interest-bearing............................................................ 14. Federal funds purchased and securities sold under agreements to repurchase: a. Federal funds purchased......................................................... 0278 108,561 14.a. b. Securities sold under agreements to repurchase ................................. 0279 5,714 14.b. 15. a. Demand notes issued to the U.S. Treasury........................................ 2840 3,007 15.a. b. Trading Liabilities (from Schedule RC-D)........................................ 3548 0 15.b. 16. Other borrowed money: a. With a remaining maturity of one year or less .................................. 2332 0 16.a. b. With a remaining maturity of more than one year................................. 2333 0 16.b. 17. Mortgage indebtedness and obligations under capitalized leases...................... 2910 6,445 17. 18. Bank's Liability on acceptances executed and outstanding............................ 2920 329 18. 19. Subordinated notes and debentures................................................... 3200 75,000 19. 20. Other Liabilities (from Schedule RC-G).............................................. 2930 38,969 20. 21. Total Liabilities (sum of items 13 through 20)...................................... 2948 2,839,614 21. 22. Limited-Life preferred stock and related surplus.................................... 3282 0 22. EQUITY CAPITAL 23. Perpetual preferred stock and related surplus....................................... 3838 0 23. 24. Common stock........................................................................ 3230 5,330 24. 25. Surplus (exclude all surplus related to preferred stock)............................ 3839 9,867 25. 26. a. Undivided profits and capital reserves.......................................... 3632 155,571 26.a. b. Net unrealized holding gains (losses) on available-for-sale securities.......... 8434 (358) 26.b. 27. Cumulative foreign currency translation adjustments................................. 28. Total equity capital (sum of items 23 through 27)................................... 3210 170,410 28. 29. Total Liabilities, Limited-Life preferred stock, and equity capital (sum of items 21, 22, and 28)....................................................... 3300 3,010,024 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external Number auditors as of any date during 1995................................................. RCON 6724 N/A M.1. 1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other ex- with generally accepted auditing standards by a certified ternal auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted audit- auditors ing standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external submits a report on the consolidated holding company auditors (but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work) 3 = Directors' examination of the bank conducted in accor- 8 = No external audit work dance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) - ------------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits.
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