-----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, SonxeiyTN3/slyrgMT1MRpdy76HsaT6bT6Gq6ovotGc5YmEYOnodtVoqAqbQzH6O +QI8x26c+kHvd+MLL1Raag== /in/edgar/work/20000828/0000950149-00-001930/0000950149-00-001930.txt : 20000922 0000950149-00-001930.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950149-00-001930 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20000828 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METRICOM INC / DE CENTRAL INDEX KEY: 0000884318 STANDARD INDUSTRIAL CLASSIFICATION: [3663 ] IRS NUMBER: 770294597 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-44648 FILM NUMBER: 711115 BUSINESS ADDRESS: STREET 1: 980 UNIVERSITY AVE CITY: LOS GRATOS STATE: CA ZIP: 95030 BUSINESS PHONE: 4083998200 MAIL ADDRESS: STREET 1: 980 UNIVERSITY AVE CITY: LOS GATOS STATE: CA ZIP: 95030 S-3 1 s-3.txt REGISTRATION STATEMENT FOR FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 2000 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ METRICOM, INC. METRICOM FINANCE, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE DELAWARE (STATE OF INCORPORATION) (STATE OF INCORPORATION) 77-0294597 77-0529272 (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
333 WEST JULIAN STREET SAN JOSE, CALIFORNIA 95110 (408) 282-3000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES) TIMOTHY A. DREISBACH PRESIDENT AND CHIEF EXECUTIVE OFFICER METRICOM, INC. 333 WEST JULIAN STREET, SAN JOSE, CALIFORNIA 95110 (408) 282-3000 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) COPIES TO: KENNETH L. GUERNSEY JEREMY W. DICKENS CYDNEY S. POSNER WEIL, GOTSHAL & MANGES LLP COOLEY GODWARD LLP 767 FIFTH AVENUE ONE MARITIME PLAZA, 20TH FLOOR NEW YORK, NEW YORK 10153 SAN FRANCISCO, CALIFORNIA 94111 (212) 310-8000 (415) 693-2000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the registration statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, as amended, 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 AMOUNT OF REGISTRATION TO BE REGISTERED OFFERING PRICE(1)(2) FEE(1)(2)(3)(4) - ------------------------------------------------------------------------------------------------------------------ Common Stock of Metricom, Inc., $0.001 par value per share(5)................................................... (9) -- Preferred Stock of Metricom, Inc., $0.001 par value per share(6)................................................... (9) -- Debt Securities(7).......................................... (9) -- Guarantees of Metricom, Inc. with respect to Debt Securities(8).............................................. (9) -- Equity Warrants of Metricom, Inc............................ (9) -- Debt Warrants............................................... (9) -- Units....................................................... (9) -- Total................................................ $300,250,000(10) $79,266 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------
(1) The proposed maximum aggregate offering price per class of security will be determined from time to time by the registrants in connection with the issuance by the registrants of the securities registered hereunder. (2) Of the unsold securities previously registered by the registrants under Registration Statement Nos. 333-91359 and 333-95669 referred to below, unsold securities with a maximum aggregate offering price of $899,750,000 are being carried forward in this registration statement pursuant to Rule 429 under the Securities Act. Accordingly, the total amount registered under this registration statement as so consolidated is $1,200,000,000. In connection with the filing of such earlier registration statements, the registrants paid registration fees with respect to the above-specified unsold securities in the aggregate amount of $244,020, consisting of $128,816 paid under Registration Statement No. 333-91359 and $115,204 paid under Registration Statement No. 333-95669. In accordance with Rule 429, the amount of registration fee reflected in the table above does not include the $244,020 previously paid to the Commission with respect to the earlier registration statements. (3) With respect to Debt Securities, excluding accrued interest and accrued amortization of discount, if any, to the date of delivery. (4) The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act. (5) Shares of Common Stock may be issued in primary offerings, upon conversion of Debt Securities and/or Preferred Stock registered hereby and/or upon exercise of Equity Warrants registered hereby. The aggregate amount of Common Stock registered hereby that may be sold in at-the-market offerings is limited to that which is permissible under Rule 415(a)(4) under the Securities Act. (6) Shares of Preferred Stock may be issued in primary offerings, upon conversion of Debt Securities registered hereby and/or upon exercise of Equity Warrants registered hereby. (7) Debt Securities may be issued in primary offerings and/or upon exercise of Debt Warrants registered hereby. Subject to note 10 below, there is being registered hereunder, by Metricom, Inc. and Metricom Finance, Inc., an indeterminate principal amount of their debt securities as may be sold, from time to time, by either of the registrants. If any debt securities are issued at an original issue discount, then the offering price shall be in such greater principal amount at maturity as shall result in aggregate gross proceeds to the registrants not to exceed $1,200,000,000 less the gross proceeds attributable to any securities previously issued pursuant to this registration statement. (8) The obligations of Metricom Finance, Inc. under Debt Securities registered hereunder will be fully and unconditionally guaranteed by Metricom, Inc. as described more fully in the registration statement. (9) Not required to be included in accordance with General Instruction II.D. of Form S-3. (10) Except as permitted by Rule 462 under the Securities Act, in no event will the aggregate maximum offering price of all securities issued from time to time pursuant to this registration statement exceed $1,200,000,000. The securities registered hereunder may be sold separately or with other securities registered hereunder. PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, THE PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT ALSO RELATES TO (a) THE $463,368,000 MAXIMUM AGGREGATE OFFERING PRICE OF UNSOLD SECURITIES PREVIOUSLY REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-3 NO. 333-91359 AND (b) $436,382,000 MAXIMUM AGGREGATE OFFERING PRICE OF UNSOLD SECURITIES PREVIOUSLY REGISTERED UNDER REGISTRATION STATEMENT ON FORM S-3 NO. 333-95669. ACCORDINGLY, THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO EACH OF SUCH EARLIER REGISTRATION STATEMENTS. POST-EFFECTIVE AMENDMENT NO. 1 SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED AUGUST 28, 2000 PROSPECTUS $1,200,000,000 METRICOM, INC. [RICHOCHET LOGO] COMMON STOCK PREFERRED STOCK DEBT SECURITIES GUARANTEES OF DEBT SECURITIES EQUITY WARRANTS DEBT WARRANTS UNITS METRICOM FINANCE, INC. DEBT SECURITIES DEBT WARRANTS UNITS GUARANTEED AS SET FORTH IN THIS PROSPECTUS BY METRICOM, INC. Metricom, Inc. may offer, from time to time, in one or more series, at prices and on terms that it will determine at the time of offering, any or all of the following: - secured or unsecured debt securities; - shares of preferred stock; - shares of common stock; - warrants to purchase debt securities or any other security; - warrants to purchase common stock or preferred stock; - units consisting of two or more of the foregoing securities and/or securities registered by Metricom Finance, Inc.; or - guarantees of debt securities of Metricom Finance, Inc. Metricom Finance, Inc., a wholly-owned subsidiary of Metricom, Inc., referred to as Metricom Finance, as co-issuer and co-obligor, may offer, from time to time, in one or more series, at prices and on terms to be determined at the time of the offering, one or more series of secured or unsecured debt securities, warrants to purchase debt securities or units consisting of debt securities, debt warrants or securities of Metricom, Inc. The obligation of Metricom Finance under any debt securities will be fully and unconditionally guaranteed by Metricom, Inc. as set forth in this prospectus. We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and the applicable supplement carefully before you invest. ------------------------- THE SECURITIES WE MAY OFFER INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 4. ------------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------- If we sell the securities through agents or underwriters, we will include their names and the fees, commissions and discounts they will receive, as well as the net proceeds to us, in the applicable prospectus supplement. The date of this prospectus is , 2000 3 TABLE OF CONTENTS
PAGE ---- Prospectus Summary................... 1 Risk Factors......................... 4 Forward-Looking Information.......... 4 Deficiency of Earnings to Fixed Charges and Deficiency of Earnings to Combined Fixed Charges and Preferred Stock Dividends.......... 4 Use of Proceeds...................... 5
PAGE ---- Description of Capital Stock......... 6 Description of Debt Securities....... 11 Description of Warrants.............. 21 Description of Units................. 23 Plan of Distribution................. 23 Legal Matters........................ 24 Experts.............................. 24 Where You Can Find More Information........................ 25
------------------------- No dealer, sales person or other person is authorized to give any information or to represent anything not contained in this prospectus or the accompanying prospectus supplement. You must not rely on any unauthorized information or representations. This prospectus and the accompanying prospectus supplement are an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus and the accompanying prospectus supplement is accurate as of the dates on their covers. Metricom(R) and Ricochet(R) are Metricom, Inc. trademarks. Trade names and trademarks of other companies appearing in this prospectus are the property of their respective holders. i 4 PROSPECTUS SUMMARY The following is a summary of Metricom, Inc.'s business. This summary highlights selected information from this prospectus and does not contain all the information that may be important to you. To understand the terms of the securities, you should read this prospectus with the accompanying prospectus supplement carefully. Together, these documents describe the specific terms of the securities we are offering. You should also carefully read the section entitled "Risk Factors" in this prospectus and the accompanying prospectus supplement and the documents identified under the caption "Where You Can Find More Information." References to "Metricom, Inc." refer to Metricom, Inc. and references to "Metricom Finance" refer to Metricom Finance, Inc. Unless the context requires otherwise, references to "we," "us" or "our" refer collectively to Metricom, Inc. and Metricom Finance. Metricom, Inc. is a leading provider of mobile wireless data access to corporate networks and the Internet. Metricom, Inc. has designed its new high-speed service, marketed under the Ricochet(R) brand name, to meet the needs of the growing number of professionals who require full access to their corporate networks and the Internet while away from the office. Metricom, Inc.'s service will also appeal to consumers who desire high-speed mobile access to the Internet. Simply by connecting a wireless modem to a laptop computer or portable electronic device, users can access their corporate networks and the Internet whenever they want and wherever they are within Metricom, Inc.'s service areas, just as they would with a wired modem. Metricom, Inc. is a Delaware corporation originally incorporated in California in 1985. Metricom Finance is a wholly-owned subsidiary of Metricom, Inc., formed for the purpose of allowing Metricom, Inc. to consummate a holding company reorganization. A holding company reorganization is a transaction effected either as a result of the transfer of all or substantially all of Metricom, Inc.'s assets to Metricom Finance, the merger of a wholly owned subsidiary of Metricom Finance with Metricom, Inc., or a merger of Metricom, Inc. into a single member limited liability company owned by Metricom Finance, after which any debt securities, issued under the registration statement of which this prospectus is a part, will become solely the obligation of a holding company. Our principal office is located at 333 West Julian Street, San Jose, California 95110; our telephone number at that location is (408) 282-3000. THE SECURITIES WE MAY OFFER Metricom, Inc. and Metricom Finance may offer various series of debt securities, warrants to purchase debt securities or units, and Metricom, Inc. may offer shares of its preferred or common stock or warrants to purchase shares of its preferred or common stock, with a total value of up to $1,200,000,000, from time to time under this prospectus at prices and on terms to be determined by market conditions at the time of offering. This prospectus provides you with a general description of the securities we may offer. Each time we offer a type or series of securities, we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities, including, to the extent applicable: - designation or classification; - aggregate principal amount or aggregate offering price; - maturity, if applicable; - rates and times of payment of interest or dividends, if any; - redemption, conversion or sinking fund terms, if any; 1 5 - voting or other rights, if any; - financial or other covenants, if any; - conversion prices and terms, if any; - in the case of a warrant, procedures and limitations relating to the exercise of the warrant, including its termination date, exercise price, duration and anti-dilution provisions; - in the case of a warrant offered concurrently with the offering of any other security, the date on and after which the warrant may be transferred separately from the other security; and - important federal income tax considerations. The prospectus supplement may also add, update or change information contained in this prospectus or in documents we have incorporated by reference. THIS PROSPECTUS MAY NOT BE USED TO COMPLETE ANY SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. We may sell the securities directly or through agents, underwriters or dealers. We, and our agents or underwriters, reserve the right to accept or reject all or part of any proposed purchase of securities. If we do offer securities through agents, underwriters or dealers we will include in the applicable prospectus supplement: - the names of those agents, underwriters or dealers; - applicable fees, discounts and commissions, to be paid to them; and - the net proceeds to us. We may also deliver this prospectus in connection with the sale of any debt securities, warrants to purchase debt securities, shares of preferred stock or common stock or warrants to purchase preferred stock or common stock that we may issue or sell pursuant to the registration statement of which this prospectus is a part. COMMON STOCK. Metricom, Inc. may offer its common stock from time to time. Subject to any preferences of outstanding shares of preferred stock, holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. Subject to any preferences of outstanding shares of preferred stock, holders of common stock are entitled to dividends when and if declared by the board of directors. PREFERRED STOCK. Metricom, Inc. may offer its preferred stock from time to time. Metricom, Inc.'s board of directors has the authority to issue its undesignated shares of preferred stock in new series and to fix the rights, preferences, privileges and restrictions of any new series, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by its stockholders, subject to rights of the holders of outstanding preferred stock. DEBT SECURITIES. We may offer debt securities from time to time, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt. The senior debt securities will rank equally with all of our other unsecured and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument governing that debt, to all of our senior indebtedness. Convertible or exchangeable debt securities will be convertible into or exchangeable for Metricom, Inc.'s common stock, preferred stock or any other security designated by Metricom, Inc. or Metricom Finance, Inc. Conversion or exchange may be mandatory or at your option and would be at prescribed conversion or exchange rates. 2 6 The debt securities will be issued under indentures between us and Bank One Trust Company, N.A. or another trustee chosen by us, referred to in this prospectus as the trustee. In this prospectus, we have summarized certain general features of the debt securities. We urge you, however, to read the prospectus supplements related to the series of debt securities being offered, as well as the complete indentures, which contain the terms of the debt securities. The indentures have been filed as exhibits to the registration statement of which this prospectus is a part. GUARANTEES. Metricom, Inc. will fully and unconditionally guarantee the obligations of Metricom Finance under the debt securities. Each guarantee with respect to senior debt securities will constitute part of Metricom, Inc.'s senior debt. Each guarantee with respect to subordinated debt securities will be subordinated to Metricom, Inc.'s senior indebtedness on the same basis as the applicable security of Metricom Finance is subordinated to the senior indebtedness of Metricom Finance. Upon the completion of a holding company reorganization. After that time, all references in the indenture and any supplemental indentures to an obligor of the debt securities will refer only to the holding company resulting from that reorganization. EQUITY WARRANTS. Metricom, Inc. may offer warrants to purchase shares of its preferred or common stock from time to time. Unless provided otherwise in the relevant prospectus supplement, holders of warrants will not generally be entitled to receive dividends paid on the preferred or common stock. Holders of warrants will not be stockholders. Any equity warrants Metricom, Inc. may issue will have only those anti-dilution protections described in the applicable prospectus supplement. If Metricom, Inc. offers warrants concurrently with the offer of other securities, including debt securities of Metricom Finance, Metricom, Inc. may provide as a term of the warrants that the warrants may not be transferred separately from the other securities for a period of time as specified in the applicable prospectus supplement. DEBT WARRANTS. We may offer warrants to purchase our debt securities from time to time. Prior to the exercise of these debt warrants, holders of debt warrants will not have any of the rights of holders of the debt securities purchasable upon the exercise and will not be entitled to payment of principal of, premium, if any, or interest, if any, on, the debt securities purchasable upon the exercise. UNITS. We may offer from time to time units consisting of two or more of the securities described above. These units may be issuable as, and for a specified period of time may be transferable as, a single security only, as distinguished from the separate constituent securities constituting such units. 3 7 RISK FACTORS The prospectus supplement applicable to each type or series of securities we offer will contain a discussion of risks applicable to an investment in Metricom, Inc. and/or Metricom Finance and to the particular types of securities that we are offering under that prospectus supplement. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed under the caption "Risk Factors" in the applicable prospectus supplement, together with all of the other information contained in the prospectus supplement or appearing or incorporated by reference in this prospectus. FORWARD-LOOKING INFORMATION This prospectus and the information incorporated herein by reference contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that are based on the current expectations that we have about Metricom, Inc. and its industry. Words such as "expect," "anticipate," "estimate," "believe," "will," "intend," "plan" and other similar expressions are used to identify some forward-looking statements, but not all forward-looking statements include these words. For example, some of these forward-looking statements relate to commercial acceptance of Metricom, Inc.'s service. All forward-looking statements involve risks and uncertainties. Metricom, Inc.'s actual results may differ significantly from our expectations and from the results expressed in or implied by these forward-looking statements. The section captioned "Risk Factors" in Metricom, Inc.'s annual report on Form 10-K for the year ended December 31, 1999 and the similarly captioned section in prospectus supplements accompanying this prospectus describe or will describe some, but not necessarily all, of the factors that could cause these differences. We urge you to read those sections carefully. Except as may be required by law, we undertake no obligation to publicly update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. DEFICIENCY OF EARNINGS TO FIXED CHARGES AND DEFICIENCY OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS Metricom, Inc.'s earnings were insufficient to cover fixed charges during each of the periods described below. Accordingly, our ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred stock dividends are not meaningful for the periods presented. The following table sets forth our deficiency of earnings to fixed charges and deficiency of earnings to combined fixed charges and preferred dividends for the periods presented.
(IN THOUSANDS) ------------------------------------------------------ SIX MONTHS SIX MONTHS ENDED ENDED YEAR ENDED DECEMBER 31, JUNE 30, JUNE 30, ---------------------------- 2000 1999 1999 1998 1997 ---------- ---------- -------- ------- ------- Deficiency of earnings to fixed charges............................ $50,651 $31,575 $ 66,292 $84,164 $59,328 ======= ======= ======== ======= ======= Deficiency of earnings to combined fixed charges and preferred dividends.......................... $76,532 $31,575 $104,526 $84,164 $59,328 ======= ======= ======== ======= =======
4 8 USE OF PROCEEDS Unless otherwise described in a prospectus supplement, we will use the net proceeds from the offering of the securities for deployment and commercialization of Metricom, Inc.'s network and for other general corporate purposes, principally working capital, funding our operating losses, capital expenditures and operating expenses related to Metricom, Inc. When we offer a particular type or series of securities, the prospectus supplement relating to those securities will describe our intended use of the net proceeds we will receive from the sale of those securities. Unless otherwise described in a prospectus supplement, pending application for specific purposes, the net proceeds of any offering of securities may be invested in short-term interest-bearing instruments and other investment-grade securities. 5 9 DESCRIPTION OF CAPITAL STOCK GENERAL Metricom, Inc. has authorized capital stock of 500,000,000 shares of common stock, $0.001 par value per share, and 80,000,000 shares of preferred stock, $0.001 par value per share. As of August 22, 2000, there were 30,758,065 shares of Metricom, Inc.'s common stock and 60,000,000 shares of Metricom, Inc.'s preferred stock outstanding. Metricom Finance has authorized capital stock of 1,000 shares of common stock, $0.001 par value. As of August 22, 2000, there were 1,000 shares issued, outstanding and held of record by Metricom, Inc. The Restated and Amended Certificate of Incorporation of Metricom, Inc. includes a number of provisions that may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of Metricom, Inc. First, Metricom, Inc.'s board of directors is classified into three classes of directors with staggered three-year terms. The restated certificate provides that directors may be removed at any time for cause by the vote of the holders of a majority of the voting power and without cause by the vote of the holders of 66 2/3% of the voting power of all outstanding voting stock. The restated certificate also provides that vacancies on the board of directors or newly created directorships shall, unless the board of directors determines otherwise or except as otherwise required by law, be filled only by the affirmative vote of a majority of directors then in office, even though less than a quorum. In addition, the restated certificate provides that, except in specified circumstances, stockholder action may be taken only at a duly called meeting of stockholders and not by a written consent. In addition, Metricom, Inc.'s Bylaws contain requirements for advance notice of stockholder proposals and director nominations. These and other provisions of the restated certificate and bylaws and Delaware law could discourage potential acquisition proposals and could delay or prevent a change in control or management of Metricom, Inc. Each of Metricom, Inc. and Metricom Finance is currently subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. Section 203 prevents certain Delaware corporations, including those whose securities are listed on the Nasdaq National Market, from engaging, under certain circumstances, in a "business combination," which includes a merger or sale of more than 10% of the corporation's assets, with any interested stockholder for three years following the date that the stockholder became an interested stockholder. An interested stockholder is a stockholder who acquired 15% or more of the corporation's outstanding voting stock without the prior approval of the corporation's board of directors. At Metricom, Inc.'s annual meeting of stockholders held on October 15, 1999, its stockholders elected not to be governed by Section 203. The election will become effective on October 15, 2000. Metricom Finance's stockholder has made the same election, which election is currently effective. The following summaries of certain provisions of our common stock and preferred stock do not purport to be complete and are subject to, and are qualified in their entirety, by the provisions of Metricom, Inc.'s restated certificate and bylaws and Metricom Finance's Certificate of Incorporation, and Bylaws, which are, or will be, filed or incorporated by reference as exhibits to the registration statement of which this prospectus is a part. COMMON STOCK Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available for the payment of dividends at the times and in the amounts that the board of directors may determine from time to time. Subject to preferences that only apply to any outstanding preferred 6 10 stock, each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Metricom, Inc.'s restated certificate does not provide for cumulative voting, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election (other than directors to be elected solely by the holders of a series of preferred stock). The common stock is not entitled to preemptive rights and is not subject to conversion or redemption. Upon a liquidation, dissolution or winding-up, the assets legally available for distribution to stockholders are distributable ratably among the holders of the common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, if any, on any outstanding preferred stock and payment of other claims of creditors. Each outstanding share of common stock is, and all shares of common stock to be outstanding upon completion of this offering will be, validly issued, fully paid and nonassessable. The transfer agent and registrar for Metricom, Inc.'s common stock is Boston Equiserve. PREFERRED STOCK The following description summarizes material terms and provisions of Metricom, Inc.'s preferred stock and the preferred stock that Metricom, Inc. may offer. Metricom, Inc.'s restated certificate authorizes 80,000,000 shares of preferred stock, of which 36,000,000 shares are designated Series A1 preferred stock, 36,000,000 shares are designated Series A2 preferred stock and 8,000,000 shares are not currently designated. Metricom, Inc.'s board of directors has the authority to issue the remaining undesignated shares of preferred stock in additional series and to fix the rights, preferences, privileges and restrictions of any new series, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of such series, without further vote or action by its stockholders, subject to rights of the holders of outstanding preferred stock. The availability of undesignated preferred stock may have the effect of delaying, deterring or preventing a change in control without further action by Metricom, Inc.'s stockholders and may adversely affect the voting and other rights of the holders of Metricom, Inc.'s common stock. Metricom Finance's certificate does not currently authorize preferred stock. The terms of the preferred stock that Metricom, Inc. may offer will be established by or pursuant to a resolution of the board of directors of Metricom, Inc. and will be issued under certificates of designation or through amendments to Metricom, Inc.'s restated certificate of incorporation. When Metricom, Inc. offers to sell preferred stock, it will describe the specific terms of the preferred stock in a supplement to this prospectus. Metricom, Inc. will also indicate in the supplement whether the general terms and provisions described in this prospectus apply to the preferred stock that Metricom, Inc. may offer. The following terms of the preferred stock, as applicable, will be set forth in a prospectus supplement relating to the preferred stock: - the title and stated value; - the number of shares Metricom, Inc. is offering; - the liquidation preference per share; - the purchase price; - the dividend rate, period and payment date, and method of calculation for dividends; - whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; - the procedures for any auction and remarketing, if any; 7 11 - the provisions for a sinking fund, if any; - the provisions for redemption or repurchase, if applicable, and any restrictions on Metricom, Inc.'s ability to exercise those redemption and repurchase rights; - any listing of the preferred stock on any securities exchange or market; - whether the preferred stock will be convertible into or exchangeable for Metricom, Inc.'s common stock or any other security, and, if applicable, the conversion or exchange price, or how it will be calculated, and the conversion or exchange period; - voting rights, if any, of the preferred stock; - preemption rights, if any; - restrictions on transfer, sale or other assignment, if any; - whether interests in the preferred stock will be represented by depositary shares; - a discussion of any material or special United States federal income tax considerations applicable to the preferred stock; - the relative ranking and preferences of the preferred stock as to dividend or liquidation rights; - any limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend or liquidation rights; and - any other material specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock. SERIES A1 AND A2 PREFERRED STOCK Metricom, Inc. currently has authorized and designated 36,000,000 shares of Series A1 preferred stock and 36,000,000 shares of Series A2 preferred stock. Of these shares, 30,000,000 shares of the Series A1 preferred stock and 30,000,000 shares of the Series A2 preferred stock are outstanding. The material rights, preferences and restrictions of these series of preferred stock are summarized below. DIVIDENDS. The holders of shares of each of the Series A1 preferred and Series A2 preferred have the right to receive cumulative dividends payable, at Metricom, Inc.'s option, in cash or additional shares of Series A1 preferred or Series A2 preferred, as the case may be, at the annual rate of 6.5% of the original issue price of $10 per share, until November 15, 2002 after which date the right to such cumulative dividends shall terminate, and holders of shares of each of the Series A1 and Series A2 preferred stock shall be entitled to dividends only when, as and if declared by Metricom, Inc.'s Board of Directors. Cumulative dividends payable to the holders of Series A1 preferred stock will be prior and in preference to any dividends payable to the holders of common stock and Series A2 preferred stock. Cumulative dividends payable to the holders of Series A2 preferred stock will be prior and in preference to the dividends payable to the holders of common stock. VOTING RIGHTS. For so long as more than 7,500,000 shares of each of the Series A1 preferred and Series A2 preferred are outstanding, the affirmative vote of the holders of at least a majority of the outstanding shares of each of the Series A1 and Series A2 preferred will be required to: - amend any provision of Metricom, Inc.'s restated certificate that changes the rights and preferences of that series so as to adversely affect the rights of the Series A1 preferred or Series A2 preferred, as the case may be, in a manner different from other classes or series of stock; 8 12 - issue any new class or series of stock ranking senior in liquidation preference or dividends to the Series A1 preferred or Series A2 preferred, as the case may be; - issue any debt securities convertible into equity securities at a price lower than $10 per share, subject to adjustment for any stock dividend, split, combination or other similar event; - redeem or repurchase, under specified circumstances, any series of stock junior to the Series A1 preferred or Series A2 preferred, as the case may be; or - declare or pay any dividend on outstanding common stock, subject to specified exceptions. In addition, for so long as more than 7,500,000 shares of either of the Series A1 preferred or Series A2 preferred are outstanding, the holders of shares of those series of preferred stock, voting as separate classes, will be entitled to elect one member of Metricom, Inc.'s board of directors to represent each series. Holders of outstanding shares of Series A1 preferred may waive this right from time to time and instead designate an observer to attend meetings of the board of directors. LIQUIDATION RIGHTS. If Metricom, Inc. is liquidated, dissolved or wound up, the holders of Series A1 preferred and holders of Series A2 preferred will be entitled to be paid out of Metricom, Inc.'s assets, before any distribution to the holders of common stock, an amount equal to the greater of the original issue price plus accrued but unpaid dividends or the amount the holders would have received if the shares had been converted to common stock. For this purpose, "liquidation" includes: - a consolidation, merger or other reorganization in which Metricom, Inc.'s stockholders prior to the transaction own less than 50% of our voting power after such transaction or other transaction or series of transactions to which we are party in which over 50% of Metricom, Inc.'s voting power is transferred; or - a sale, lease or other disposition of all or substantially all of Metricom, Inc.'s assets. REDEMPTION. On November 15, 2009, Metricom, Inc. must redeem all outstanding shares of Series A1 and Series A2 preferred. In the event of a change of control or major acquisition by Metricom, Inc., each holder of Series A1 and Series A2 preferred will have the right to require Metricom, Inc. to redeem all, but not less than all, of the shares of preferred stock held by that holder. For purposes of this provision, a "change of control" means an event by which any person or group, other than Vulcan Ventures Incorporated ("Vulcan"), MCI WorldCom, Inc. ("MCI WorldCom") and their respective affiliates: - becomes a beneficial owner of more than 30% of Metricom, Inc.'s outstanding equity securities, or - acquires the right to elect at least 30% of Metricom, Inc.'s board of directors. For purposes of this provision, a "major acquisition" means the acquisition by Metricom, Inc. of more than 50% of the outstanding equity securities or all or substantially all of the assets of any entity, or Metricom, Inc.'s merger with another entity in which it is the surviving entity, in each case, for equity consideration exceeding 25% of its outstanding equity securities. CONVERSION. Holders of each of the Series A1 and Series A2 preferred have the right to convert their shares into common stock of Metricom, Inc., subject to the limitation that Series A1 preferred shares do not become convertible until May 2002, at which time 25% of the Series A1 preferred stock originally issued will become convertible. Following each six-month period thereafter, an additional 25% of the Series A1 preferred stock originally issued will become convertible. Each share of Series A1 and Series A2 preferred is initially convertible into one share of common stock. The conversion rates and prices for each of the Series A1 and Series A2 preferred will be adjusted in the event of any stock split or combination, dividend payment or distribution on the common stock, reclassification or other change to the common stock, or reorganization, merger or sale of assets. Each 9 13 of the Series A1 and Series A2 preferred will automatically be converted into shares of common stock in the event that shares of either series are transferred by the original purchaser to a person other than Vulcan, MCI WorldCom or their respective affiliates. If the holders of the Series A2 preferred stock exercise their right to convert their shares into common stock, then upon conversion Metricom, Inc. must pay to those holders who convert all accrued but unpaid dividends on the shares being converted. Dividends may not be paid on Series A2 preferred stock until all dividends payable on Series A1 preferred stock are fully paid, or declared and funds set aside for payment. Therefore, a conversion by holders of Series A2 preferred stock into common stock will also require Metricom, Inc. to pay all accrued but unpaid dividends on the Series A1 preferred stock and to declare and set aside funds for the then-current dividend period. REGISTRATION RIGHTS. Under Metricom, Inc.'s amended and restated registration rights agreement, dated November 15, 1999, the holders of 60,000,000 shares of our currently outstanding series of redeemable convertible preferred stock are entitled to certain registration rights with respect to the shares of common stock issuable upon conversion of the preferred stock. Subject to certain exceptions, including Metricom, Inc.'s right to defer a demand registration under specified conditions, holders of an aggregate of at least 500,000 shares of registrable securities have the right to require Metricom, Inc. to use its best efforts to register under the Securities Act its registrable securities, the anticipated offering price of which, net of underwriting discounts and commissions, would exceed $10,000,000. Additionally, in the event that Metricom, Inc. registers any of its common stock, either for its own account or for the account of any other stockholder, it is required to notify holders of registrable securities and, subject to certain limitations, to include in that registration the registrable securities of holders requesting registration. Registrable securities need not be included in registration statements relating to employee benefit plans or with respect to corporate reorganizations or other transactions under Rule 145 of the Securities Act. Metricom, Inc. is also required, subject to certain limitations, to give notice of and effect certain short-term registrations upon request of holders of registrable securities. Metricom, Inc. is not required to effect more than two registrations on Form S-3 in any 12-month period unless the registration is requested by Vulcan or MCI WorldCom or certain of their affiliates; however, it is not required to effect this registration if it has effected one or more registrations upon one of these holders' requests within the preceding 12-month period. 10 14 DESCRIPTION OF DEBT SECURITIES The following description summarizes certain general terms and provisions of the debt securities that we may offer. When we offer to sell a particular series of debt securities, we will describe the specific terms of the series in a supplement to this prospectus. We also will indicate in the supplement whether the general terms and provisions described in this prospectus apply to a particular series of debt securities. The debt securities will be issued under one or more indentures between us and Bank One Trust Company, N.A. or another trustee chosen by us and qualified to act under the Trust Indenture Act of 1939, as amended. The form of indenture will be filed as an exhibit to the registration statement of which this prospectus is a part, and every definitive or supplemental indenture will be filed by us from time to time by means of an exhibit to Form 8-K and will be available for inspection at the corporate trust office of the trustee, or as described below under "Where You Can Find More Information." The indentures will be subject to, and governed by, the Trust Indenture Act. We will execute an indenture if and when we issue any debt securities. The statements contained in this prospectus relating to the indentures and the debt securities we may issue are summaries and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the indentures (including those terms made a part of the indenture by reference to the Trust Indenture Act) and the relevant debt securities. Capitalized terms used below but not defined in this prospectus shall have the meanings set forth in the indentures. References below to an "indenture" are references to the applicable indenture under which we issue a particular series of debt securities. GENERAL We will establish the terms of each series of debt securities by or pursuant to a resolution of our Board of Directors or by a supplemental indenture. We will describe the particular terms of each series of debt securities in a prospectus supplement relating to that series. We can issue an unlimited amount of debt securities under the indenture. We can issue these securities in one or more series with the same or various maturities, at par, at a premium or at a discount. We will set forth in a prospectus supplement relating to any series of debt securities being offered, the following terms of the debt securities, as applicable: - the title of the debt securities; - whether the debt securities are senior debt securities or subordinated debt securities or any combination thereof and, if subordinated debt securities, the subordination terms relating to those securities; - the price or prices, expressed as a percentage of the aggregate principal amount, at which we will sell the debt securities; - any limit upon the aggregate principal amount of the debt securities; - the date or dates on which we will pay the principal on the debt securities; - the rate or rates, which may be fixed or variable, or the method by which such rate or rates will be determined, at which the debt securities will bear interest, if any; - the date or dates from which any interest will accrue, the dates upon which any interest will be payable and the record dates for payment of interest; - the place or places where principal of, premium, if any, and interest, if any, on, the debt securities will be payable; - any obligation we have to redeem, repurchase or repay the debt securities in whole or in part pursuant to any sinking fund or analogous provisions or at the option of a holder of the debt 11 15 securities, and the price or prices at which and the period or periods within which and the terms and conditions upon which we will redeem, repurchase or repay the debt securities; - the denominations in which the debt securities will be issued, if other than denominations of U.S. $1,000 and any integral multiple thereof; - the portion of the principal amount of the debt securities payable upon declaration of the acceleration of the maturity date, if other than the principal amount; - any addition to or material change in the covenants described in this prospectus or in the indenture with respect to the debt securities; - any addition to or change in the events of default described in this prospectus or in the indenture with respect to the debt securities; - whether we will issue the debt securities in global form and, if so, the terms and conditions, if any, upon which global debt securities may be exchanged for other individual securities, and the name of the depositary for the debt securities; - the terms and conditions, if any, upon which the debt securities shall be exchanged for or converted into common stock or preferred stock of Metricom, Inc., or warrants or any other security; - any provisions relating to any security provided for the debt securities; - the form and terms of any guarantee of the debt securities; - if the principal amount payable at the stated maturity of any debt securities will not be determinable as of any one or more dates prior to the stated maturity, the amount which will be deemed to be the principal amount as of any date for any purpose, including the principal amount which will be due and payable upon any maturity other than the stated maturity or which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined); - if applicable, that the debt securities are defeasible pursuant to the provisions of the indenture; - whether the debt securities will be listed on any securities exchange or included in any other market or quotation or trading system; - any trustee or fiscal or authenticating or payment agent, issuing and paying agent, transfer agent or registrar or any other person or entity to act in connection with the debt securities for or on our behalf or on behalf of the holders of the debt securities; and - any other material terms of the debt securities, which may modify or delete any provision of the indenture as it applies to that series. We may issue debt securities at a discount below their stated principal amount and provide for less than the entire principal amount of the debt securities to be payable upon declaration of acceleration of maturity. In that event, we will describe any material federal income tax considerations and other material considerations in the applicable prospectus supplement. We may issue debt securities in bearer form, with or without coupons. In that event, we will describe any material federal income tax considerations and other material considerations in the applicable prospectus supplement. STATUS OF DEBT SECURITIES Except in the case of a holding company reorganization, the senior debt securities will rank equally with all of our other unsecured and unsubordinated indebtedness. Our obligations pursuant to 12 16 subordinated debt securities will be subordinate in right of payment to all of our senior indebtedness. With respect to any series of subordinated debt securities, except as otherwise set forth in the applicable prospectus supplement, our "senior indebtedness" means the principal of, premium, if any, and any interest (including interest accruing subsequent to the commencement of any proceeding for our bankruptcy or reorganization under any applicable bankruptcy, insolvency or similar law now or hereafter in effect) and all other monetary obligations of every kind or nature due on or in connection with the following: - all our indebtedness (including senior debt securities) regardless of when incurred (a) for borrowed money or (b) in connection with our acquisition of assets other than in the ordinary course of business, for the payment of which we are liable directly or indirectly by guarantee, letter of credit, obligation to purchase or acquire or otherwise, or the payment of which is secured by a lien, charge or encumbrance on assets we acquired; - amendments, modifications, renewals, extensions and deferrals of any such indebtedness; - any indebtedness issued in exchange for any such indebtedness (these three bullet points being collectively referred to as "Debt"); provided, however, that the following will not constitute senior indebtedness with respect to subordinated debt securities; - any Debt as to which, in the instrument evidencing such Debt or pursuant to which such Debt was issued, it is expressly provided that such Debt is subordinate in right of payment to all our Debt not expressly subordinated to such Debt; and - any of our Debt in respect of subordinated debt securities and any Debt which by its terms refers explicitly to the subordinated debt securities and states that such Debt shall not be senior in right of payment. Generally, we may not make any payment pursuant to the subordinated debt securities unless all amounts of principal, premium, if any, and interest then due on all applicable senior indebtedness has been paid in full or if there has occurred and is continuing beyond any applicable grace period a default in any payment with respect to any applicable senior indebtedness, or if there has occurred any event of default with respect to any applicable senior indebtedness permitting the holders to accelerate the maturity of the senior indebtedness, or if any judicial proceeding is pending with respect to any such default. However, exceptions to these restrictions may be set forth in the applicable prospectus supplement. Upon any distribution of our assets upon dissolution, winding-up, liquidation or reorganization, the holders of our senior indebtedness will be entitled to receive payment in full of principal, premium, if any, and interest (including interest accruing subsequent to the commencement of any proceeding for our bankruptcy or reorganization under any applicable bankruptcy, insolvency or similar law now or hereafter in effect) before any payment is made on the subordinated debt securities. By reason of this subordination, in the event of our insolvency, holders of our senior indebtedness may receive more, ratably, and holders of the subordinated debt securities having a claim pursuant to the subordinated debt securities may receive less, ratably, than our other creditors. These subordination provisions will not prevent the occurrence of any event of default (an "Event of Default") in respect of the subordinated debt securities. If we offer debt securities, the applicable prospectus supplement will set forth the aggregate amount of outstanding indebtedness, if any, as of the most recent practicable date that by the terms of such debt securities would be senior to such debt securities. The applicable prospectus supplement will also set forth any limitation on our ability to issue any additional senior indebtedness and will describe in more detail the material terms of the subordination provisions of these securities, including relevant definitions. 13 17 CONVERSION RIGHTS The terms, if any, on which a series of debt securities may be exchanged for or converted into shares of common stock, preferred stock, warrants or any other security will be set forth in the applicable prospectus supplement. EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT Unless we specify otherwise in the applicable prospectus supplement, payment of principal, premium, if any, and any interest on the debt securities will be payable, and the exchange of and the transfer of debt securities will be registrable, at the office of the trustee or at any other office or agency maintained by us for that purpose subject to the limitations of the indenture. Unless we indicate otherwise in the applicable prospectus supplement, we will issue the debt securities in denominations of U.S. $1,000 or integral multiples thereof. We will not require a service charge for any registration of transfer or exchange of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge. GLOBAL DEBT SECURITIES We may issue the debt securities of a series in the form of one or more global securities that we will deposit with a depositary or its nominee identified in the applicable prospectus supplement. In that event, we will issue one or more global securities in a denomination or in aggregate denominations equal to the portion of the aggregate principal amount of outstanding debt securities of the series to be represented by a global security or securities. We will deposit each global security with the depositary or nominee or a custodian therefor and each global security will bear a legend regarding the restrictions on exchanges and registration of transfer thereof referred to below and any other matters as may be provided for pursuant to the applicable indenture. Notwithstanding any provision of the indenture or any debt security described in this prospectus, no global security may be transferred to, or registered or exchanged for debt securities registered in the name of, any person or entity other than the depositary for the global security or any nominee of the depositary, and no such transfer may be registered, unless: - the depositary has notified us that it is unwilling or unable to continue as depositary for the global security or has ceased to be qualified to act as such as required by the applicable indenture; - we execute and deliver to the trustee an order that the global security shall be so transferable, registrable and exchangeable; or - there shall exist circumstances, if any, as may be described in the applicable prospectus supplement. All debt securities issued in exchange for a global security or any portion thereof will be registered in such names as the depositary may direct. We will describe the specific terms of the depositary arrangement with respect to any portion of a series of debt securities to be represented by a global security in the applicable prospectus supplement. We expect that the following provisions will apply to depositary arrangements. Unless otherwise specified in the applicable prospectus supplement, debt securities which are to be represented by a global security to be deposited with or on behalf of a depositary will be represented by a global security registered in the name of the depositary or its nominee. Upon the issuance of a global security, and the deposit of the global security with or on behalf of the depositary for the global security, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the debt securities represented by the global security to the accounts of institutions that have accounts with the depositary or its nominee ("participants"). The accounts to be credited will be designated by the underwriters or 14 18 agents who sell the debt securities or by us, if the debt securities are offered and sold directly by us. Ownership of beneficial interests in the global security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in the global security will be shown on, and the transfer of that ownership interest will be effected only through, records maintained by the depositary or its nominee for the global security. Ownership of beneficial interests in the global security by persons that hold through participants will be shown on, and the transfer of that ownership interest within such participant will be effected only through, records maintained by the participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities in certificate form. The foregoing limitations and these laws may impair the ability to transfer beneficial interests in the global securities. So long as the depositary for a global security, or its nominee, is the registered owner of the global security, the depositary or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the global security for all purposes under the indenture. Unless otherwise specified in the applicable prospectus supplement, owners of beneficial interests in the global security will not be entitled to have debt securities of the series represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of the series in certificate form and will not be considered the holders thereof for any purposes under the indenture. Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the depositary and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the indenture. If we request any action of holders or if an owner of a beneficial interest in a global security desires to give any notice or take any action a holder is entitled to give or take under the indenture, the depositary will authorize the participants to give that notice or take that action, and participants would authorize beneficial owners owning through those participants to give that notice or take that action or would otherwise act upon the instructions of beneficial owners owning through them. We undertake no responsibility for the actions of the depositary, participants and client participants or for enforcing their respective standing procedures. Notwithstanding any other provisions to the contrary in the indenture, the rights of the beneficial owners of the debt securities to receive payment of the principal of, premium, if any, and interest, if any, on, the debt securities, on or after the respective due dates expressed in the debt securities, or to institute suit for the enforcement of these payments on or after these respective dates, shall not be impaired or affected without the consent of the beneficial owners. Principal of, premium and interest on a global security will be payable in the manner described in the applicable prospectus supplement. CONSOLIDATION, MERGER AND SALE OF ASSETS Unless we specify otherwise in the applicable prospectus supplement, the indenture will provide that we may not consolidate with or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our property or assets to any person (a "successor person") in one or more related transactions unless, among other things: - we are the surviving corporation or the successor person, if other than us, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; - the successor person, if other than us, assumes all of our obligations under the debt securities and the indenture; and - immediately prior to and after giving effect to the transaction, no Event of Default shall have occurred and be continuing. Notwithstanding the foregoing, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties and assets to us. 15 19 EVENTS OF DEFAULT Unless we specify otherwise in the applicable prospectus supplement, the following will constitute Events of Default under the indenture with respect to debt securities of any series: - failure to pay principal of, or premium, if any, on, any debt security of that series when due and payable; - failure to pay any interest on any debt security of that series when due, and continuance of that default for 30 days; - failure to pay any mandatory sinking fund payment, when and as due by the terms of any debt securities of that series; - failure to comply with any of our other agreements in the debt securities of that series or in the indenture with respect to that series, which default continues for the period and after the notice provided in the applicable prospectus supplement; - failure to pay principal when due or resulting in acceleration of any of our other debt where the aggregate principal amount with respect to which that default or acceleration has occurred exceeds a certain amount provided in the applicable prospectus supplement, provided that this default will be cured or waived if the default that resulted in the acceleration of our other indebtedness is cured or waived or that indebtedness is discharged; and - certain events of bankruptcy, insolvency or reorganization. Except as set forth in the applicable prospectus supplement, a default under the fourth or fifth bullet points above is not an Event of Default with respect to a particular series of debt securities until the trustee or the holders of at least 25% in principal amount of the then outstanding debt securities of that series notify us of the default and we do not cure the default within 60 days after receipt of the notice. The notice must specify the default, demand that it be remedied and state that the notice is a "Notice of Default." Except as we may otherwise specify in the applicable prospectus supplement, an Event of Default with respect to outstanding debt securities of any series, other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization, shall occur and be continuing, either the trustee or the holders of at least 25% in principal amount of the outstanding debt securities of that series by notice, as provided in the indenture, may declare the unpaid principal amount (or, if the debt securities of that series are original issue discount securities, such lesser amount as may be specified in the terms of that series) of, and any accrued and unpaid interest on, all debt securities of that series to be due and payable immediately. However, at any time after a declaration of acceleration with respect to debt securities of any series has been made, but before a judgment or decree based on that acceleration has been obtained, the holders of a majority in principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul that acceleration. For information as to waiver of defaults, see "Modification and Waiver" below. The indenture will provide that, subject to the duty of the trustee during an Event of Default to act with the required standard of care, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders, unless those holders shall have offered to the trustee reasonable indemnity. Subject to certain provisions, including those requiring indemnification of the trustee, the holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the debt securities of that series. We will be required to furnish to the trustee under the indenture annually a statement as to our performance of our obligations under the indenture and as to any default in our performance. 16 20 MODIFICATION AND WAIVER Subject to certain exceptions, the indenture will provide that we and the trustee may amend the indenture or the debt securities with the written consent of the holders of a majority in principal amount of the then outstanding debt securities of each series affected by the amendment with each series voting as a separate class. The holders of a majority in principal amount of the then outstanding debt securities of any series may also waive compliance by us with certain restrictive provisions of the indenture with respect to the debt securities of that series; provided, however, that, except as otherwise specified in the applicable prospectus supplement, without the consent of each holder of debt securities affected, an amendment or waiver may not, among other things: - reduce the percentage of the principal amount of debt securities whose holders must consent to an amendment or waiver; - reduce the rate or change the time for payment of interest on any debt security, including default interest; - reduce the principal of or premium, if any, or change the fixed maturity of any debt security, or reduce the amount of, or postpone the date fixed for, redemption or the payment of any sinking fund or analogous obligation with respect to any series of debt securities; - make any debt security payable in currency other than that stated in the debt security; - make any change in the provisions concerning waivers of default or Events of Default by holders or concerning the rights of holders to recover the principal of, premium, if any, and interest on, any debt security; - waive a default in the payment of the principal of, premium, if any, and interest on, any debt security, except as otherwise provided in the indenture; or - reduce the principal amount of original issue discount securities payable upon acceleration of the maturity thereof. We and the trustee may amend the indenture or the debt securities without notice to or the consent of any holder of a debt security to, among other things: - cure any ambiguity, defect or inconsistency; - comply with the indenture's provisions with respect to successor corporations; - comply with any requirements of the Securities and Exchange Commission in connection with the qualification of the indenture under the Trust Indenture Act; - provide for uncertificated debt securities in addition to or in place of certificated debt securities; - add to, change or eliminate any of the provisions of the indenture in respect of one of more series of debt securities, provided, however, that any addition, change or elimination (a) shall neither (i) apply to any debt security of any series created prior to the execution of such amendment and entitled to the benefit of such provision, nor (ii) modify the rights of a holder of any such debt security with respect to such provision, or (b) shall become effective only when there is no outstanding debt security of any series created prior to such amendment and entitled to the benefit of such provision; - make any other change that does not adversely affect in any material respect the interest of any holder; or - establish additional series of debt securities as permitted by the indenture. 17 21 The holders of a majority in principal amount of the then outstanding debt securities of any series, by notice to us and to the trustee, may waive an existing default or Event of Default and its consequences except a default or Event of Default in the payment of the principal of, premium, if any, or any interest on, any debt security with respect to the debt securities of that series or in the payment of any sinking fund installment with respect to the debt securities of that series or in respect of any provision in the indenture which cannot be modified or amended without the consent of the holder of each outstanding debt security of such series affected; provided, however, that the holders of a majority in principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. In the event we issue debt securities at a discount, then the above shall apply to the holders of a majority in principal amount at maturity. DEFEASANCE OF DEBT SECURITIES. Unless otherwise specified in the applicable prospectus supplement, the indenture will provide that we may be discharged from any and all obligations in respect of the debt securities of any series (except for certain obligations to register the transfer or exchange of debt securities of that series, to replace stolen, lost or mutilated debt securities of that series, and to maintain paying agencies) upon the deposit with the trustee, in trust, of money and/or U.S. government obligations, that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants to pay and discharge each installment of principal, premium, if any, and interest, if any, on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments or other redemption date in accordance with the terms of the indenture and the debt securities. This discharge may occur only if, among other things, we have received from, or there has been published by, the United States Internal Revenue Service a ruling, or, since the date of execution of the indenture, there has been a change in the applicable United States federal income tax law, in either case to the effect that holders of the debt securities of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if the deposit, defeasance and discharge had not occurred. The applicable prospectus supplement will describe any other conditions we must meet in order to legally defease a particular class or series of debt securities. DEFEASANCE OF CERTAIN COVENANTS. Unless otherwise specified in the applicable prospectus supplement, the indenture will provide that, upon compliance with certain conditions, we may omit to comply with the restrictive covenants contained in the indenture, as well as any additional covenants or Events of Default contained in a supplement to the indenture, a Board Resolution or an Officers' Certificate delivered pursuant to the indenture. The conditions include: - depositing with the trustee money and/or U.S. government obligations, that, through the payment of interest and principal in respect thereof in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants to pay principal, premium, if any, and interest, if any, on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments or other redemption date in accordance with the terms of the indenture and the debt securities; and - delivering to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of that deposit and related covenant defeasance and will be subject to United States federal income tax in the same amount and in the same manner and 18 22 at the same times as would have been the case if the deposit and related covenant defeasance had not occurred. The applicable prospectus supplement will describe any additional conditions we must meet in order to defease the covenants applicable to a particular class or series of debt securities. DEFEASANCE OF CERTAIN COVENANTS AND EVENTS OF DEFAULT. In the event we exercise our option to omit to comply with certain covenants contained in the indenture with respect to any series of debt securities and the debt securities of that series are declared due and payable because of the occurrence of any Event of Default, the amount of money and/or U.S. government obligations on deposit with the trustee will be sufficient to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting from the Event of Default. However, we will remain liable for those payments. SATISFACTION AND DISCHARGE The indentures will, upon a written request or order signed by one of our designated officers and delivered to the trustee, cease to be of further effect with respect to any series of debt securities, except as to any surviving rights of registration of transfer or exchange or conversion of debt securities of that series expressly provided for, and the trustee will be required to execute proper instruments acknowledging satisfaction and discharge of such indenture as to that series when either: - we have delivered to the trustee for cancellation all debt securities of that series previously authenticated and delivered, other than: - debt securities that have been destroyed, lost or stolen and which have been replaced or paid, as provided in the indentures, and - debt securities for which money sufficient to make all payment on the debt securities has previously been deposited in trust with the trustee or any paying agent or segregated and held in trust by us with any remaining amounts to thereafter be repaid to us, as provided in the indentures; or - all debt securities, other than convertible debt securities, of the series: - have become due and payable, or - will become due and payable at their stated maturity within one year, or - if redeemable at our option, are to be called for redemption within one year under arrangements reasonably satisfactory to the trustee for the giving of notice of redemption by the trustee in our name and at our expense; and - we irrevocably deposit or cause to be deposited with the trustee as trust funds in trust an amount of money or government obligations sufficient to pay and discharge the entire indebtedness on those debt securities not previously delivered to the trustee for cancellation, including all principal of and any premium and installments of interest to the date of such deposit in the case of debt securities which have become due and payable or to the stated maturity or redemption of the debt securities, as applicable. In addition, in order to satisfy and discharge the securities, we will be required to: - pay or cause to be paid all other sums payable under the debt securities by us, and - deliver an officers' certificate and an opinion of counsel to the trustee, each stating that all conditions precedent provided for relating to the satisfaction and discharge of the indentures as to such series have been satisfied. 19 23 REGARDING THE TRUSTEE The indenture and provisions of the Trust Indenture Act incorporated by reference in the indenture contain certain limitations on the rights of a trustee, should it become our creditor, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any claim, as security or otherwise. The trustee and its affiliates may engage in, and will be permitted to continue to engage in, other transactions with us and our affiliates; provided, however, that if it acquires any conflicting interest (as defined in the Trust Indenture Act), it must eliminate that conflict or resign. The holders of a majority in principal amount of the then outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee. The Trust Indenture Act and the indenture provide that in case an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its rights and powers, to use the degree of care and skill of a prudent person in the conduct of that person's affairs. Subject to this provision, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders of the debt securities issued thereunder, unless they have offered to the trustee indemnity satisfactory to it. GUARANTEES The obligations of Metricom Finance under the debt securities will be fully and unconditionally guaranteed by Metricom, Inc. Each guarantee of Metricom Finance's obligations under senior debt securities will constitute part of the senior debt of Metricom, Inc. and will rank pari passu with all other unsecured and unsubordinated debt of Metricom, Inc. Each guarantee with respect to subordinated debt securities will be subordinated to Metricom, Inc.'s senior indebtedness on the same basis as provided above with respect to the subordination of the relevant subordinated debt securities to senior indebtedness of Metricom Finance. Upon completion of a holding company reorganization, the guarantee automatically, and without further notice to or action by the holders of the debt securities, will be released entirely and will cease to be of any force and effect. HOLDING COMPANY REORGANIZATION A holding company reorganization is a transaction after which all or substantially all our assets and operations will be owned and operated by a subsidiary corporation or limited liability company wholly owned by a holding company, and the holding company will remain as the sole obligor in respect of the debt securities. We currently expect that this type of reorganization of our operations may be effected either as a result of the transfer of all or substantially all of Metricom, Inc.'s assets to Metricom Finance, the merger of a wholly owned subsidiary of Metricom Finance with Metricom, Inc., or a merger of Metricom, Inc. into a single-member limited liability company owned by Metricom Finance, after which the debt securities will become solely the obligation of a holding company. That holding company will have no material assets other than the capital stock of its subsidiaries. If we complete a holding company reorganization, the debt securities will be effectively junior to all of the liabilities, including credit facilities, other indebtedness and trade payables that the holding company's subsidiaries may incur, all of which subsidiary debt also could be secured by liens. While we have not made a final determination as to whether to undertake a holding company reorganization, because of our ambitious growth plans and in order to preserve our flexibility to create a corporate structure that may facilitate our ability to raise additional capital in the future, we will structure the debt securities to allow us to reorganize if we choose to do so. Prior to completing a holding company reorganization, Metricom Finance will not have any operations or any material assets and will not have any revenues. As a result, prospective investors should not expect Metricom Finance to contribute to the amounts required to be paid on the debt 20 24 securities. Moreover, Metricom, Inc. has fully and unconditionally guaranteed the obligations of Metricom Finance with respect to the debt securities solely for the purpose of enabling Metricom, Inc. and Metricom Finance to register the debt securities, as co-obligors, on the registration statement of which this prospectus is a part. Upon the completion of a holding company reorganization, the debt securities will, by their terms, be the obligation solely of a holding company, meaning a company the only asset of which is the stock of or an ownership interest in either a corporate subsidiary (or subsidiaries) or a limited liability company, and the guarantee automatically, and without further notice to or action by the holders of the debt securities, will be released entirely and will cease to be of any force and effect. After that time, all references in the indenture and any supplemental indentures to an obligor of the debt securities will refer only to the holding company. GOVERNING LAW The indentures and debt securities will be governed by and construed in accordance with the laws of the State of New York. The indentures are subject to the provisions of the Trust Indenture Act that are required to be a part thereof and will, to the extent applicable, be governed by such provisions. DESCRIPTION OF WARRANTS We may issue warrants to purchase debt securities, or debt warrants, as well as warrants to purchase preferred stock or common stock, or equity warrants. We refer to debt warrants and equity warrants collectively as warrants. Warrants may be issued independently or together with any securities and may be attached to or separate from those securities. We will issue warrants under warrant agreements to be entered into between us and a bank or trust company, as warrant agent. When we issue warrants, we will describe the specific terms of the warrants in a prospectus supplement. DEBT WARRANTS The applicable prospectus supplement will describe the terms of debt warrants offered under that prospectus supplement, the warrant agreement relating to the debt warrants and the debt warrant certificates representing the debt warrants, including the following: - the title of the debt warrants; - the aggregate number of debt warrants; - the price or prices at which the debt warrants will be issued; - the designation, aggregate principal amount and terms of the debt securities purchasable upon exercise of the debt warrants, and the procedures and conditions relating to the exercise of the debt warrants; - the designation and terms of any related debt securities, common stock, preferred stock or any other security with which the debt warrants are issued, and the number of the debt warrants issued with each debt security, share of common stock, share of preferred stock or any other security; - the date, if any, on and after which the debt warrants and the related debt securities, preferred stock, common stock or any other security will be separately transferable; - the principal amount of debt securities purchasable upon exercise of each debt warrant; - the date on which the right to exercise the debt warrants will commence and the date on which those rights will expire; 21 25 - the maximum or minimum number of debt warrants which may be exercised at any time; - information with respect to book-entry procedures, if any; - a discussion of any material federal income tax considerations; and - any other material terms of the debt warrants and terms, procedures and limitations relating to the exercise of the debt warrants. Debt warrant certificates will be exchangeable for new debt warrant certificates of different denominations. Debt warrants may be exercised at the office of the warrant agent or any other office indicated in the prospectus supplement. Prior to the exercise of their debt warrants, holders of debt warrants will not have any of the rights of holders of the debt securities purchasable upon the exercise and will not be entitled to payment of principal of, premium, if any, or interest, if any, on, the debt securities purchasable upon the exercise. EQUITY WARRANTS The applicable prospectus supplement will describe the terms of equity warrants offered under that prospectus supplement, the warrant agreements relating to the equity warrants and the warrant certificates representing the equity warrants, including the following: - the title of the equity warrants; - the securities (i.e., preferred stock or common stock) for which the equity warrants are exercisable; - the price or prices at which the equity warrants will be issued; - if applicable, the designation and terms of the debt securities, preferred stock, common stock or any other security with which the equity warrants are issued, and the number of equity warrants issued with each debt security or share of preferred stock, common stock or other security; - if applicable, the date on and after which the equity warrants and the related debt securities, preferred stock, common stock or any other security will be separately transferable; - the date on which the right to exercise the equity warrants will commence, and the date on which those rights will expire; - the maximum or minimum number of equity warrants that may be exercised at any time; - information with respect to book-entry procedures, if any; - if applicable, a discussion of any material federal income tax considerations; and - any other material terms of the equity warrants, including terms, procedures and limitations relating to any anti-dilution provisions relating to the equity warrants and to the exchange and exercise of the equity warrants. Unless otherwise provided in the applicable prospectus supplement, holders of equity warrants will not be entitled, by virtue of being such holders, to vote, consent, receive dividends, receive notice as stockholders with respect to any meeting of stockholders for the election of directors or any other matter, or to exercise any rights whatsoever as stockholders. Except as set forth in the applicable prospectus supplement, the exercise price payable and the number of shares of common stock or preferred stock purchasable upon the exercise of each equity warrant will be subject to adjustment in certain events, including the issuance of a stock dividend to holders of common stock or preferred stock or a stock split, reverse stock split, combination, subdivision or reclassification of common stock or preferred stock. In lieu of adjusting the number of shares of common stock or preferred stock 22 26 purchasable upon exercise of each equity warrant, Metricom, Inc. may elect to adjust the number of equity warrants. Unless otherwise provided in the applicable prospectus supplement, no adjustments in the number of shares purchasable upon exercise of the equity warrants will be required until cumulative adjustments require an adjustment of at least 1% thereof. Metricom, Inc. may, at its option, reduce the exercise price at any time. No fractional shares will be issued upon exercise of equity warrants, but it will pay the cash value of any fractional shares otherwise issuable. Notwithstanding the foregoing, except as otherwise provided in the applicable prospectus supplement, in case of any consolidation, merger, or sale or conveyance of our property as an entirety or substantially as an entirety, the holder of each outstanding equity warrant shall have the right to the kind and amount of shares of stock and other securities and property (including cash) receivable by a holder of the number of shares of common stock or preferred stock into which the equity warrant was exercisable immediately prior to the particular triggering event. EXERCISE OF WARRANTS Each warrant will entitle the holder to purchase the principal amount, or number of, securities at the exercise price as shall in each case be set forth in, or be determinable as set forth in, the applicable prospectus supplement. Warrants may be exercised at any time up to the close of business on the expiration date set forth in the prospectus supplement relating to the warrants offered thereby. After the close of business on the expiration date, unexercised warrants will become void. Warrants may be exercised as set forth in the applicable prospectus supplement. Upon receipt of payment and the warrant certificate properly completed and duly executed at the office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will, as soon as practicable, forward the securities purchasable upon that exercise. If less than all of the warrants represented by a particular warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants. DESCRIPTION OF UNITS We may issue units consisting of two or more other constituent securities. These units may be issuable as, and for a specified period of time may be transferable as, a single security only, as distinguished from the separate constituent securities constituting such units. When we issue units, we will describe their specific terms in a prospectus supplement, including the following: - the title of any series of units; - identification and description of the separate constituent securities constituting the units; - the price or prices at which the units will be issued; - if applicable, the date on and after which the constituent securities constituting the units will become separately transferable; - information with respect to book-entry procedures, if any; - a discussion of any material federal income tax considerations; and - any other material terms of the units and their constituent securities. PLAN OF DISTRIBUTION We may sell the securities being offered by this prospectus directly or through agents, underwriters or dealers. 23 27 Agents designated by us from time to time may solicit offers to purchase the securities offered by this prospectus. Any agent involved in the offer or sale of those securities may be deemed to be an underwriter under the Securities Act and we will name that agent and describe any commissions payable by us to that agent in a prospectus supplement. Any agent appointed by us will be acting on a reasonable efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis. We may be obligated under agreements with these agents to indemnify them against civil liabilities, including liabilities under the Securities Act. These agents may also engage in transactions with or perform services for us in the ordinary course of business. If we utilize any underwriters in any sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement with those underwriters at the time of sale to them, and the names of the underwriters and the terms of the transaction will be set forth in the prospectus supplement. That prospectus supplement will be used by the underwriters to make resales of the securities in respect of which this prospectus is delivered to the public. We may be obligated under the underwriting agreements with these underwriters to indemnify them against civil liabilities, including liabilities under the Securities Act. These underwriters may also engage in transactions with or perform services for us in the ordinary course of business. If we utilize a dealer in any sale of the securities in respect of which the prospectus is delivered, we will sell the securities to the dealer, as principal. The dealer may then resell those securities to the public at varying prices to be determined by the dealer at the time of resale. We may be obligated under agreements with these dealers to indemnify them against civil liabilities, including liabilities under the Securities Act. These dealers may also engage in transactions with or perform services for us in the ordinary course of business. If so indicated in the applicable prospectus supplement, we will authorize agents, underwriters or dealers to solicit offers from purchasers to purchase the securities from us at the public offering price set forth in the prospectus supplement under delayed delivery contracts providing for payment and delivery of those securities on a specified date in the future. These delayed delivery contracts will be subject to only those conditions set forth in the prospectus supplement, and we will set forth the commission payable for solicitation of these offers in the prospectus supplement. If we sell any warrants pursuant to this prospectus and an applicable prospectus supplement, we may deliver the prospectus in connection with the sale of our common stock upon the exercise of the applicable warrants. LEGAL MATTERS Cooley Godward LLP, San Francisco, California will provide us with an opinion as to the legality of the securities we are offering. Weil, Gotshal & Manges LLP, New York, New York, will serve as counsel to underwriters, dealers or agents purchasing any of the securities we are offering by this prospectus. Attorneys with Cooley Godward LLP own an aggregate of 1,621 shares of our common stock. EXPERTS The audited financial statements and schedules incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said reports. 24 28 WHERE YOU CAN FIND MORE INFORMATION Metricom, Inc. files annual and quarterly reports and proxy statements, and Metricom, Inc. and Metricom Finance may file current reports and other information with the SEC. We have filed with the SEC a registration statement on Form S-3 under the Securities Act. This prospectus does not contain all of the information set forth in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. You may read and copy the registration statement, as well as our reports, proxy statements and other information at the SEC's public reference room at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our SEC filings are also available at the SEC's web site at "http://www.sec.gov." The SEC allows us to "incorporate by reference" information that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. This prospectus and the information that we file later with the SEC may update and supersede the information incorporated by reference. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of the offering of all securities to which this prospectus relates: - Metricom, Inc. Annual Report on Form 10-K for the year ended December 31, 1999; - Metricom, Inc. Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2000; - Metricom, Inc. Current Reports on Form 8-K filed on January 28, 2000, February 7, 2000, February 10, 2000 and February 16, 2000; and - The description of Metricom, Inc.'s common stock contained in our registration statement on Form 8-A filed with the SEC on February 28, 1992. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Corporate Secretary Metricom, Inc. 333 West Julian Street San Jose, California 95110 (408) 282-3000 25 29 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated costs and expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the offering of the securities being registered. All the amounts shown are estimates, except for the registration fee. SEC registration fee........................................ $ 79,266 Accounting fees and expenses................................ 50,000 Legal fees and expenses..................................... 75,000 Miscellaneous............................................... 45,734 -------- Total............................................. $250,000 ========
We will pay all fees and expenses associated with filing this registration statement. ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS. Section 145 of the Delaware General Corporation Law, or the DGCL, authorizes a court to award or a corporation's board of directors to grant indemnification to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act. Our Restated Bylaws provide for mandatory indemnification of our directors and executive officers and permissive indemnification of other officers, employees and other agents to the maximum extent permitted by the DGCL. Metricom, Inc. has entered into indemnification agreements with Metricom, Inc.'s directors and certain officers. The indemnification agreements provide our directors with further indemnification to the maximum extent permitted by the DGCL. We also have obtained directors and officers insurance to insure our directors and officers against certain liabilities, including liabilities under the securities laws. The form of underwriting agreement filed as Exhibit 1.1 to the registration statement provides for indemnification by the underwriters of the registrant and its officers and directors for certain liabilities under the Securities Act or otherwise. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - ------- ----------------------- 1.1 Form of Underwriting Agreement* 3.1(a) Restated Certificate of Incorporation of Metricom, Inc.** 3.1(b) Certificate of Amendment of Amended and Restated Certificate of Incorporation of Metricom, Inc.** 3.2 Bylaws of Metricom, Inc.*** 3.3 Certificate of Incorporation of Metricom Finance, Inc.**** 3.4 Bylaws of Metricom Finance, Inc.**** 4.1 Form of Warrant Agreement, including form of warrant certificate.* 4.2 Senior Debt Indenture to be entered into between Metricom, Inc. and Bank One Trust Company, N.A., as trustee.**** 4.3 Subordinated Debt Indenture to be entered into between Metricom, Inc. and Bank One Trust Company, N.A., as trustee.****
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EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - ------- ----------------------- 5.1 Opinion of Cooley Godward LLP. 12.1 Statement regarding computation of deficiency of earnings to fixed charges and deficiency of earnings to combined fixed charges and preferred stock dividends. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1). 24.1 Power of Attorney (included in the signature page). 25.1 Statement of Eligibility and Qualification on Form T-1 of Bank One Trust Company, N.A. to act as trustee under the indentures.
- ------------------------- * To be filed by amendment or incorporated by reference from reports filed under the Securities Exchange Act of 1934. ** Filed as Exhibits 3.1(a) and (b) to the Form 10-Q filed by Metricom, Inc. for the quarter ended June 30, 2000 and incorporated herein by reference. *** Filed as Exhibit 3.2 to the Form 10-K405/A filed by Metricom, Inc. for the year ended December 31, 1997 and incorporated herein by reference. **** Filed as Exhibits 4.2, 4.3, 4.4 and 4.5 to the Registration Statement filed by Metricom, Inc. and Metricom Finance on Form S-3, as amended (No. 333-91359) and incorporated herein by reference. ITEM 17. UNDERTAKINGS The undersigned registrant undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the provisions described in Item 15 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. The undersigned registrant further undertakes that: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; II-2 31 (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Forms S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) 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 therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection(a) of section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under section 305(b)(2) of the Trust Indenture Act. II-3 32 SIGNATURES METRICOM, INC. Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on August 28, 2000. METRICOM, INC. By: /s/ TIMOTHY A. DREISBACH ------------------------------------ Timothy A. Dreisbach President and Chief Executive Officer KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy A. Dreisbach, Dale W. Marquart and James E. Wall, and each or any one of them, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments and registration statements filed pursuant to Rule 462 to this registration statement), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ TIMOTHY A. DREISBACH President and Chief Executive August 28, 2000 - ------------------------------------------------ Officer and Director Timothy A. Dreisbach (Principal Executive Officer) /s/ JAMES E. WALL Chief Financial Officer (Principal August 28, 2000 - ------------------------------------------------ Financial and Accounting Officer) James E. Wall /s/ BRAM JOHNSON Director August 28, 2000 - ------------------------------------------------ Bram Johnson /s/ RALPH DERRICKSON Director August 23, 2000 - ------------------------------------------------ Ralph Derrickson /s/ ROBERT P. DILWORTH Director August 28, 2000 - ------------------------------------------------ Robert P. Dilworth /s/ JUSTIN L. JASCHKE Director August 28, 2000 - ------------------------------------------------ Justin L. Jaschke
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SIGNATURE TITLE DATE --------- ----- ---- /s/ DAVID MOORE Director August 28, 2000 - ------------------------------------------------ David Moore /s/ WILLIAM D. SAVOY Director August 28, 2000 - ------------------------------------------------ William D. Savoy
II-5 34 SIGNATURES METRICOM FINANCE, INC. Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Gatos, State of California, on August 28, 2000. METRICOM FINANCE, INC. By: /s/ TIMOTHY A. DREISBACH ------------------------------------ Timothy A. Dreisbach President and Chief Executive Officer KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Timothy A. Dreisbach, Dale W. Marquart and James E. Wall, and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments and registration statements filed pursuant to Rule 462) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ TIMOTHY A. DREISBACH President and Chief August 28, 2000 - ------------------------------------------ Executive Officer and Director Timothy A. Dreisbach (Principal Executive Officer) /s/ JAMES E. WALL Chief Financial Officer (Principal August 28, 2000 - ------------------------------------------ Financial and Accounting Officer) James E. Wall /s/ DALE W. MARQUART Director August 28, 2000 - ------------------------------------------ Dale W. Marquart
II-6 35 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT - ------- ----------------------- 1.1 Form of Underwriting Agreement* 3.1(a) Restated Certificate of Incorporation of Metricom, Inc.** 3.1(b) Certificate of Amendment of Amended and Restated Certificate of Incorporation of Metricom, Inc.** 3.2 Bylaws of Metricom, Inc.*** 3.3 Certificate of Incorporation of Metricom Finance, Inc.**** 3.4 Bylaws of Metricom Finance, Inc.**** 4.1 Form of Warrant Agreement, including form of warrant certificate.* 4.2 Senior Debt Indenture to be entered into between Metricom, Inc. and Bank One Trust Company, N.A., as trustee.**** 4.3 Subordinated Debt Indenture to be entered into between Metricom, Inc. and Bank One Trust Company, N.A., as trustee.**** 5.1 Opinion of Cooley Godward LLP. 12.1 Statement regarding computation of deficiency of earnings to fixed charges and deficiency of earnings to combined fixed charges and preferred stock dividends. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1). 24.1 Power of Attorney (included in the signature page). 25.1 Statement of Eligibility and Qualification on Form T-1 of Bank One Trust Company, N.A. to act as trustee under the indentures.
- ------------------------- * To be filed by amendment or incorporated by reference from reports filed under the Securities Exchange Act of 1934. ** Filed as Exhibits 3.1(a) and (b) to the Form 10-Q filed by Metricom, Inc. for the quarter ended June 30, 2000 and incorporated herein by reference. *** Filed as Exhibit 3.2 to the Form 10-K405/A filed by Metricom, Inc. for the year ended December 31, 1997 and incorporated herein by reference. **** Filed as Exhibits 4.2, 4.3, 4.4 and 4.5 to the Registration Statement filed by Metricom, Inc. and Metricom Finance on Form S-3, as amended (No. 333-91359) and incorporated herein by reference. EX-5.1 2 ex5-1.txt OPINION OF COOLEY GODWARD LLP 1 EXHIBIT 5.1 [COOLEY GODWARD LLP LETTERHEAD] August 28, 2000 Metricom, Inc. Metricom Finance, Inc. 333 West Julian Street San Jose, CA 95110 Ladies and Gentlemen: We have acted as counsel to Metricom, Inc., a Delaware corporation ("Metricom"), and Metricom Finance, Inc., a Delaware corporation ("Metricom Finance"), in connection with the registration under the Securities Act of 1933, as amended (the "Securities Act"), on Form S-3 (file no. ________) of (i) shares of common stock, par value $0.001, of Metricom (the "Common Stock"), (ii) one or more series of preferred stock, par value $0.001 per share, of Metricom, including preferred stock convertible into and/or exchangeable for Common Stock or other securities of Metricom (the "Preferred Stock"), (iii) debt securities (the "Debt Securities") of Metricom and/or Metricom Finance, including Debt Securities convertible into or exchangeable for Common Stock or Preferred Stock of Metricom or other securities of Metricom or Metricom Finance, as applicable, and which Debt Securities are, as to Metricom Finance's obligations thereunder, fully and unconditionally guaranteed by Metricom (the "Guarantees") to the extent set forth in any indentures governing the Debt Securities (the "Indentures"), (iv) warrants to purchase such Common Stock, Preferred Stock or any other equity security of Metricom (the "Equity Warrants"), (v) warrants to purchase Debt Securities or any other debt security of Metricom (the "Debt Warrants" and, together with the Equity Warrants, the "Warrants"), and (vi) units consisting of two or more of the foregoing securities (the "Units") to be offered and sold by Metricom and/or Metricom Finance, as applicable, from time to time pursuant to Rule 415 of the General Rules and Regulations promulgated under the Securities Act (the "Securities Act Rules"), with aggregate gross proceeds of up to $1,200,000,000 in each case pursuant to terms and conditions to be designated by Metricom and/or Metricom Finance at the time of the offering. The Common Stock, Preferred Stock, Debt Securities, Equity Warrants, Debt Warrants, Guarantees and Units are collectively referred to herein as the "Securities." In connection with this opinion, we have examined and relied upon the originals, or copies certified to our satisfaction, of such records, documents, certificates, opinions, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. In rendering this opinion, we have assumed: the genuineness and authenticity of all signatures on original documents; the authenticity of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; and the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents. In rendering this opinion, we have also assumed that, prior to any offering and sale of the Securities, the Board of Directors (or a special committee thereof authorized to act on its behalf) of Metricom and/or Metricom Finance, as applicable, will duly authorize the terms of and the 1. 2 prices at which (A) shares of Common Stock are to be issued and sold, (B) shares of Preferred Stock are to be issued and sold, and (if the Preferred Stock is convertible into or exchangeable for Common Stock or another series of Preferred Stock, the method and terms of conversion or exchange for the Common Stock or such other series of Preferred Stock issuable upon such conversion or exchange), (C) the Debt Securities are to be issued and sold in accordance with the terms of one or more Indentures (and if Debt Securities are convertible into or exchangeable for Common Stock or Preferred Stock or other Debt Securities, the method and terms of conversion or exchange for the Common Stock or Preferred Stock or other Debt Securities issuable upon such conversion or exchange), (D) the Equity Warrants are to be issued and sold, and upon exercise of the Equity Warrants, the prices at which the shares of Common Stock or Preferred Stock are to be issued and sold, (E) the Debt Warrants are to be issued and sold, and upon exercise of the Debt Warrants, the prices at which the Debt Securities are to be issued and sold. We express no opinion herein concerning any laws other than the federal laws of the United States, the laws of the State of California and the Delaware General Corporation Law (the "DGCL"). We express no opinion as to whether the laws of any jurisdiction other than those identified above are applicable to the subject matter hereof. We note that the parties have designated the laws of the State of New York as the laws governing the Offered Debt Securities. Our opinion in paragraph 3 below as to the validity, binding effect and enforceability of the Offered Debt Securities is premised upon the result that would be obtained if a California court were to apply the internal laws of the State of California (notwithstanding the designation of the laws of the State of New York) to the interpretation and enforcement of the Offered Debt Securities. We are not rendering any opinion as to compliance with any antifraud law, rule or regulation relating to securities or to the sale or issuance thereof. On the basis of the foregoing and in reliance thereon, and subject to the qualifications herein stated, we are of the opinion that: 1. With respect to any offering of Common Stock, when (i) the registration statement, as finally amended (including all necessary post-effective amendments) (the "Registration Statement"), has become effective; (ii) an appropriate prospectus supplement with respect to the shares of Common Stock has been prepared, delivered and filed in compliance with the Securities Act and the applicable Securities Act Rules; (iii) if the shares of Common Stock are sold pursuant to a purchase, underwriting or similar agreement, such purchase, underwriting or similar agreement has been duly authorized, executed and delivered by Metricom and the other parties thereto and has become a valid and binding agreement of Metricom; (iv) the Board of Directors, including any appropriate committee appointed thereby, and appropriate officers of Metricom have taken all necessary corporate action to approve the issuance and terms of the shares of Common Stock and related matters; (v) if the shares of Common Stock are to be sold in connection with the Debt Securities, such Debt Securities have been duly authorized, executed and delivered by Metricom, Metricom Finance and other parties thereto and sold pursuant to a valid and effective registration statement; and (vi) the terms of the shares of Common Stock and of their issuance and sale have been duly established in conformity with the operative certificate of incorporation and bylaws of Metricom and the DGCL so as not to violate any applicable law, the operative certificate of incorporation or bylaws of Metricom or to result in a default under or breach of any agreement or instrument binding upon Metricom and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Metricom, then the shares of Common Stock (including, without limitation, any Common Stock duly issued upon (a) the exchange or conversion of any shares of Preferred Stock that are exchangeable or convertible into Common Stock, (b) the exercise of any Equity Warrants exercisable for Common Stock or (c) the exchange or conversion of the Offered Debt Securities (as defined below) or any other securities of Metricom that are exchangeable or convertible into Common Stock), when issued and sold in accordance with a duly authorized, executed and delivered purchase, underwriting or similar agreement, will be duly authorized, validly issued, fully paid and nonassessable, assuming that a sufficient number of shares of Common Stock are authorized or reserved and available for issuance and that the consideration for the issuance and sale of such shares of Common Stock is not less than the par value of the Common Stock. 2. 3 2. With respect to any offering of Preferred Stock, when (i) the Registration Statement has become effective; (ii) an appropriate prospectus supplement with respect to the shares of Preferred Stock has been prepared, delivered and filed in compliance with the Securities Act and the applicable Securities Act Rules; (iii) if the shares of Preferred Stock are sold pursuant to a purchase, underwriting or similar agreement, such purchase, underwriting, or similar agreement has been duly authorized, executed and delivered by Metricom and the other parties thereto and has become a valid and binding agreement of Metricom; (iv) the Board of Directors, including any appropriate committee appointed thereby, and appropriate officers of Metricom have taken all necessary corporate action to approve the issuance and terms of the shares of Preferred Stock and related matters; (v) if the shares of Preferred Stock are to be sold in connection with the Debt Securities, such Debt Securities have been duly authorized, executed and delivered by Metricom, Metricom Finance and other parties thereto and sold pursuant to a valid and effective registration statement; and (vi) the terms of the shares of Preferred Stock and of their issuance and sale have been duly established in conformity with the operative certificate of incorporation and bylaws of Metricom and the DGCL so as not to violate any applicable law, the operative certificate of incorporation or bylaws of Metricom or to result in a default under or breach of any agreement or instrument binding upon Metricom and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Metricom, then the Preferred Stock (including, without limitation, any Preferred Stock duly issued upon (a) the exchange or conversion of any shares of Preferred Stock that are exchangeable or convertible into another series of Preferred Stock, (b) the exercise of any Equity Warrants exercisable for Preferred Stock or (c) the exchange or conversion of the Offered Debt Securities or any other securities of Metricom that are exchangeable or convertible into Preferred Stock), when issued and sold in accordance with a duly authorized, executed and delivered purchase, underwriting or similar agreement, will be duly authorized, validly issued, fully paid and nonassessable, assuming that a sufficient number of shares of Preferred Stock are authorized or reserved and available for issuance and that the consideration for the issuance and sale of such shares of Preferred Stock is not less than the par value of the Preferred Stock. 3. 4 3. With respect to any offering of any series of Debt Securities and related Guarantees (the "Offered Debt Securities"), when (i) the Registration Statement has become effective; (ii) an appropriate prospectus supplement with respect to the Offered Debt Securities has been prepared, delivered and filed in compliance with the Securities Act and the applicable Securities Act Rules; (iii) if the Offered Debt Securities are sold pursuant to a purchase, underwriting, or similar agreement, such purchase, underwriting or similar agreement has been duly authorized, executed and delivered by Metricom, Metricom Finance and the other parties thereto, as applicable, and has become a valid and binding agreement of Metricom and/or Metricom Finance, as applicable; (iv) the terms of the Offered Debt Securities and of their issuance and sale have been duly established in conformity with any Indentures so as not to violate any applicable law or the operative certificate of incorporation or bylaws of Metricom and/or Metricom Finance, as applicable, or to result in a default under or breach of any agreement or instrument binding upon Metricom and/or Metricom Finance, as applicable, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Metricom and/or Metricom Finance, as applicable; (v) any Indentures have been qualified under the Trust Indenture Act of 1939, as amended; (vi) any Indentures have been duly authorized, executed and delivered by the relevant trustee; and (vii) the Offered Debt Securities have been duly executed and manually authenticated by duly authorized officers of the relevant trustee in accordance with the provisions of any Indentures and duly delivered to the purchasers thereof upon payment of the agreed upon consideration therefor, then the Offered Debt Securities (including, without limitation, any Offered Debt Securities issued upon the exercise of any Debt Warrants exercisable for Offered Debt Securities), when issued and sold in accordance with any Indentures and a duly authorized, executed and delivered purchase, underwriting or similar agreement, will be valid and binding obligations of Metricom and Metricom Finance, as applicable, enforceable against Metricom and Metricom Finance, as applicable, in accordance with their respective terms, subject to (a) general equity principles and the limitations on the availability of equitable relief, including, without limitation, specific performance; (b) the effect of applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, arrangement, suretyship, dissolution, moratorium, receivership or other similar laws relating to or affecting creditors' rights generally; (c) limitations created by or arising under statute or case law on a debtor's or surety's ability to waive rights or benefits, including without limitation, the possible right of exoneration of a guarantor if the creditor materially alters the original obligation of the principal without the consent of the guarantor, elects remedies for default that impair the subrogation or reimbursement rights of the guarantor against the principal, or otherwise takes, without notifying the guarantor, any action that materially prejudices such guarantor; (d) limitations created by or arising under statute or case law on the enforceability of certain covenants and provisions of agreements where (i) the breach of such covenants or provisions imposes restrictions or burdens upon the debtor or surety and it cannot be demonstrated that the enforcement of such restrictions or burdens is reasonably necessary for the protection of the creditor or (ii) the creditor's enforcement of such covenants or provisions under the circumstances would violate the creditor's implied covenant of good faith and fair dealing; (e) limitations on the right of a lender to impose added charges for late payments or defaults by the borrower, where it is determined that such charges bear no reasonable relation to the damage suffered by the lender as a result of such late payments or defaults or where the requirements of California Civil Code Section 2954.5 are not met; (f) the effect of California Civil Code Section 1717 on the recovery of attorneys' fees in contract actions; (g) the effect of California Civil Code Section 3433; (h) limitations imposed by law and public policy on indemnification and exculpation; (i) defenses available to guarantors generally; and (j) any other limitations which, in the event of any default by Metricom or Metricom Finance in its obligations with respect to the Offered Debt Securities, would act as a limitation on the rights of the creditor in accordance with California law, but which would not prevent the creditor from exercising legally adequate remedies for realization of the principal benefits intended to be provided by the Offered Debt Securities. 4. 5 4. With respect to any offering of Warrants, when (i) the Registration Statement has become effective; (ii) an appropriate prospectus supplement with respect to the Warrants has been prepared, delivered and filed in compliance with the Securities Act and the applicable Securities Act Rules; (iii) if the Warrants are sold pursuant to a purchase, underwriting or similar agreement, such purchase, underwriting or similar agreement has been duly authorized, executed and delivered by Metricom, Metricom Finance and other parties thereto, as applicable, and has become a valid and binding agreement of Metricom and/or Metricom Finance, as applicable; (iv) the Board of Directors, including any appropriate committee appointed thereby, and appropriate officers of Metricom and/or Metricom Finance, as applicable, have taken all necessary corporate action to approve the issuance and terms of the Warrants and related matters; (v) if the Warrants are to be sold in connection with Debt Securities or other securities of Metricom or Metricom Finance, such other securities have been duly authorized, executed and delivered by Metricom, Metricom Finance and other parties thereto, as applicable, and sold pursuant to a valid and effective registration statement; (vi) the terms of the Warrants and of their issuance and sale have been duly established in conformity with the operative certificate of incorporation and bylaws of Metricom and/or Metricom Finance, as applicable, so as not to violate any applicable law or the operative certificate of incorporation or bylaws of Metricom and/or Metricom Finance, as applicable, or to result in a default under or breach of any agreement or instrument binding upon Metricom and/or Metricom Finance, as applicable, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Metricom and/or Metricom Finance, as applicable, then the Warrants, when issued and sold in accordance with a duly authorized, executed and delivered purchase, underwriting or similar agreement, will be valid and binding obligations of Metricom and/or Metricom Finance, as applicable, enforceable against Metricom and/or Metricom Finance, as applicable, in accordance with their respective terms, subject to (a) general equity principles and the limitations on the availability of equitable relief, including, without limitation, specific performance, and (b) the effect of applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, arrangement, suretyship, dissolution, moratorium, receivership or other similar laws relating to or affecting creditors' rights generally. 5. 6 We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this firm under the caption "Legal Matters" in the Prospectus forming a part of the Registration Statement. Sincerely, Cooley Godward LLP /s/ KENNETH L. GUERNSEY - ----------------------- Kenneth L. Guernsey cc: Timothy A. Dreisbach 6. EX-12.1 3 ex12-1.txt STATEMENT REGARDING COMPUTATION OF DEIFICENCY 1 EXHIBIT 12.1 STATEMENT REGARDING COMPUTATION OF DEFICIENCY OF EARNINGS TO FIXED CHARGES AND DEFICIENCY OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The Company's deficiency of earnings to fixed charges and deficiency of earnings to combined fixed and preferred stock dividends were computed as set forth below.
(In Thousands) ----------------------------------------------------------------- Six Months Six Months Ended Ended Year Ended December 31, June 30, June 30, -------------------------------- 2000 1999 1999 1998 1997 ----------------------------------------------------------------- Interest, including amounts capitalized $16,578 $ 2,814 $ 5,884 $ 3,939 $ 4,151 Amortization of debt discounts, premiums and capitalized costs 2,376 116 1,051 1,114 0 ----------------------------------------------------------------- Fixed charges $18,954 $ 2,930 $ 6,935 $ 5,053 $ 4,151 ================================================================= Net loss $50,651 $31,575 $ 66,292 $84,164 $59,328 ----------------------------------------------------------------- Deficiency of earnings to fixed charges $50,651 $31,575 $ 66,292 $84,164 $59,328 ----------------------------------------------------------------- Preferred stock dividends 24,557 0 37,905 0 0 Accretion on preferred stock 1,324 0 329 0 0 ----------------------------------------------------------------- Deficiency of earnings to combined fixed charges and preferred dividends $76,532 $31,575 $104,526 $84,164 $59,328 -----------------------------------------------------------------
EX-23.1 4 ex23-1.txt CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 3, 2000 included in the Metricom, Inc.'s Form 10-K for the year ended December 31, 1999, and to all references to our Firm included in this registration statement. /s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP San Jose, California August 23, 2000 EX-25.1 5 ex25-1.txt STATEMENT OF ELIGIBILITY AND QUALIFICATION 1 EXHIBIT 25.1 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) __ ------------------ BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 31-0838515 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 100 EAST BROAD STREET, COLUMBUS, OHIO 43271-0181 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION 1 BANK ONE PLAZA, SUITE IL1-0126 CHICAGO, ILLINOIS 60670-0126 ATTN: SANDRA L. CARUBA, VICE PRESIDENT, (312) 336-9436 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ------------------ METRICOM, INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 77-0294597 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) METRICOM FINANCE, INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 77-0529272 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 333 WEST JULIAN STREET SAN JOSE, CALIFORNIA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 95110-2335 (ZIP CODE) DEBT SECURITIES (TITLE OF INDENTURE SECURITIES) 2 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. 3 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. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Bank One Trust Company, National Association, 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 Chicago and State of Illinois, on the 18th day of August, 2000. BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, TRUSTEE BY /S/ SANDRA L. CARUBA --------------------------------- SANDRA L. CARUBA VICE PRESIDENT *EXHIBITS 1, 2, 3, AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-4 OF U S WEST COMMUNICATIONS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 2000 (REGISTRATION NO. 333-32124). 4 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT August 18, 2000 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of an indenture between Metricom Inc., Metricom Finance, Inc. and Bank One Trust Company, National Association, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION BY: /s/ SANDRA L. CARUBA ---------------------------- SANDRA L. CARUBA VICE PRESIDENT 5 EXHIBIT 7 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 03/31/00 State #: 391581 FFIEC 032 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1 City, State Zip: Columbus, OH 43271 Transit #: 04400003
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 2000 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
DOLLAR AMOUNTS IN THOUSANDS C300 ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCON a. Noninterest-bearing balances and currency and coin(1) ......... 0081 48,450 1.a b. Interest-bearing balances(2) .................................. 0071 17,750 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) ..... 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D) .. 1773 5,714 2.b 3. Federal funds sold and securities purchased under agreements to resell .......................................................... 1350 396,644 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RCON RC-C) ........................................................... 2122 87,817 4.a b. LESS: Allowance for loan and lease losses ..................... 3123 10 4.b c. LESS: Allocated transfer risk reserve ......................... 3128 0 4.c d. Loans and leases, net of unearned income, allowance, and RCON reserve (item 4.a minus 4.b and 4.c) ......................... 2125 87,807 4.d 5. Trading assets (from Schedule RD-D) ............................. 3545 0 5. 6. Premises and fixed assets (including capitalized leases) ........ 2145 25,200 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 0 8. 9. Customers' liability to this bank on acceptances outstanding .... 2155 0 9. 10. Intangible assets (from Schedule RC-M) .......................... 2143 26,345 10. 11. Other assets (from Schedule RC-F) ............................... 2160 176,297 11. 12. Total assets (sum of items 1 through 11) ........................ 2170 784,207 12.
(1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 6 Legal Title of Bank: Bank One Trust Company, N.A. Call Date: 03/31/00 State #: 391581 FFIEC 032 Address: 100 Broad Street Vendor ID: D Cert #: 21377 Page RC-1 City, State Zip: Columbus, OH 43271 Transit #: 04400003
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS ----------------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C.....................RCON from Schedule RC-E, part 1)...............................................2200 567,764 13.a (1) Noninterest-bearing(1)................................................6631 506,455 13.a1 (2) Interest-bearing......................................................6636 61,309 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, part II) (1) Noninterest-bearing (2) Interest-bearing. 14. Federal funds purchased and securities sold under agreements to repurchase:...............................................................RCFD 2800 0 14 15. a. Demand notes issued to the U.S. Treasury..................................RCON 2840 0 15.a b. Trading Liabilities (from Schedule RC-D)..................................RCFD 3548 0 15.b 16. Other borrowed money: RCON a. With original maturity of one year or less................................2332 0 16.a b. With original maturity of more than one year.............................A547 0 16.b c. With original maturity of more than three years...........................A548 0 16.c 17. Not applicable............................................................... 18. Bank's liability on acceptance executed and outstanding......................2920 0 18. 19. Subordinated notes and debentures............................................3200 0 19. 20. Other liabilities (from Schedule RC-G).......................................2930 83,885 20. 21. Total liabilities (sum of items 13 through 20)...............................2948 651,649 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus................................3838 0 23. 24. Common stock.................................................................3230 800 24. 25. Surplus (exclude all surplus related to preferred stock).....................3839 45,157 25. 26. a. Undivided profits and capital reserves....................................3632 86,585 26.a b. Net unrealized holding gains (losses) on available-for-sale securities................................................................8434 16 26.b c. Accumulated net gains (losses) on cash flow hedges........................4336 0 26.c 27. Cumulative foreign currency translation adjustments 28. Total equity capital (sum of items 23 through 27)............................3210 132,558 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28)........................................3300 784,207 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 auditors as of any date during 1996 RCFD 6724 Number M.1. 1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external 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 auditing auditors 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 8 = No external audit work accordance 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. -----END PRIVACY-ENHANCED MESSAGE-----