SEC Filings - Microsoft - 0000891020-96-001563

8/14/2019 SEC Filings - Microsoft - 0000891020-96-001563

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-----BEGIN PRIVACY-ENHANCED MESSAGE-----Proc-Type: 2001,MIC-CLEAROriginator-Name: [email protected]:MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINenTWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQABMIC-Info: RSA-MD5,RSA,Hf1n81YLZ5R8xske0pVRhwz1wnf6RyUbeqYopqH5C2FjmvgyV9kkE9z/0i8Rg1m961bzm0aGbLFF/Rv6VmnkjA==

0000891020-96-001563.txt : 199612170000891020-96-001563.hdr.sgml : 19961217ACCESSION NUMBER: 0000891020-96-001563CONFORMED SUBMISSION TYPE: S-3/APUBLIC DOCUMENT COUNT: 8

FILED AS OF DATE: 19961216SROS: NASD

FILER:

COMPANY DATA:COMPANY CONFORMED NAME: MICROSOFT CORPCENTRAL INDEX KEY: 0000789019STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED

SOFTWARE [7372]IRS NUMBER: 911144442

STATE OF INCORPORATION: WAFISCAL YEAR END: 0630

FILING VALUES:FORM TYPE: S-3/ASEC ACT: 1933 ActSEC FILE NUMBER: 333-17143FILM NUMBER: 96680854

BUSINESS ADDRESS:STREET 1: ONE MICROSOFT WAY #BLDG 8STREET 2: NORTH OFFICE 2211

CITY: REDMONDSTATE: WAZIP: 98052BUSINESS PHONE: 2068828080

MAIL ADDRESS:STREET 1: ONE MICROSOFT WAY - BLDG 8STREET 2: NORTH OFFICE 2211CITY: REDMONDSTATE: WAZIP: 98052-6399


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S-3/A1AMENDMENT NO. 2 TO FORM S-3

1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON

DECEMBER 16, 1996

REGISTRATION NO. 333-17143- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

UNITED STATES

SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

------------------------

AMENDMENT NO. 2TO

REGISTRATION STATEMENT

ON FORM S-3UNDER

THE SECURITIES ACT OF 1933------------------------

MICROSOFT CORPORATION(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

WASHINGTON 91-1144442(STATE OR OTHER JURISDICTION (IRS

EMPLOYEROF INCORPORATION OR ORGANIZATION)

IDENTIFICATION NO.)

ONE MICROSOFT WAYREDMOND, WASHINGTON 98052-6399

(206) 882-8080(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER

INCLUDING


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AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)------------------------

ROBERT A. ESHELMAN, ESQ.

ONE MICROSOFT WAYREDMOND, WASHINGTON 98052-6399

(206) 882-8080(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE

NUMBER,INCLUDING AREA CODE, OF AGENT FOR SERVICE)

------------------------

COPIES OF ALL COMMUNICATIONS TO:

RICHARD B. DODD, ESQ. ANDREW D.SOUSSLOFF, ESQ.

PRESTON GATES & ELLIS SULLIVAN &CROMWELL

5000 COLUMBIA CENTER 125 BROAD STREET701 FIFTH AVENUE NEW YORK, NEW YORK

10004-2498SEATTLE, WASHINGTON 98104-7078

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TOTHE PUBLIC: As soonas practicable after the effective date of this Registration Statement.

If the only securities being registered on this form are being offeredpursuant to dividend or interest reinvestment plans, please check the followingbox: [ ]

If any of the securities being registered on this Form are to be offered ona delayed or continuous basis pursuant to Rule 415 under the Securities Act of

1933, other than securities offered only in connection with dividend or interestreinvestment plans, please check the following box: [ ]

------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATIONSTATEMENT ON SUCH DATE ORDATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTILTHE REGISTRANT SHALLFILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THATTHIS REGISTRATIONSTATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN


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ACCORDANCE WITH SECTION 8(a) OFTHE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATIONSTATEMENT SHALL BECOMEEFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT

TO SAID SECTION 8(a),MAY DETERMINE.- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------

2

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses relating to the distribution will be borne by the registrant.Such expenses are estimated to be as follows:

Registration Fee -- Securities and Exchange Commission................... $261,364NASD Filing Fees and Expenses (Including Legal Fees)..................... 37,500Nasdaq National Market Listing Fee....................................... 50,000Transfer Agent and Registrar Fees........................................ 3,000Legal Fees and Expenses.................................................. 180,000Printing Expenses........................................................ 85,000

Trustee Fees............................................................. 5,000Accountant's Fees and Expenses........................................... 51,500Miscellaneous Expenses................................................... 51,636

--------Total.......................................................... $725,000

========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article XII of the Restated Articles of Incorporation of the Company

authorizes the Company to indemnify any present or former director or officer tothe fullest extent not prohibited by the Washington Business Corporation Act,public policy or other applicable law. The Washington Business Corporation Act(Sections 23B.08.510 through .570) authorizes a corporation to indemnify itsdirectors, officers, employees, or agents in terms sufficiently broad to permitsuch indemnification under certain circumstances for liabilities (includingprovisions permitting advances for expenses incurred) arising under theSecurities Act.

The directors and officers of the Company are entitled to indemnificationby the Underwriters against any cause of action, loss, claim, damage, orliability to the extent it arises out of or is based upon the failure of each


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Underwriter to comply with the Prospectus delivery requirements under thefederal securities laws or any applicable state securities laws or upon anyuntrue statement or alleged untrue statement or omission or alleged omissionmade in this Registration Statement and the Prospectus contained herein, as the

same shall be amended or supplemented, made in reliance upon and in conformitywith written information furnished to the Company by such Underwriter throughGoldman, Sachs & Co. expressly for use therein.

In addition, the Company maintains directors' and officers' liabilityinsurance under which the Company's directors and officers are insured againstloss (as defined in the policy) as a result of claims brought against them fortheir wrongful acts in such capacities.

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ITEM 16. LIST OF EXHIBITS.

EXHIBIT NO.DESCRIPTION PAGE

OR FOOTNOTE- ----------- ------------------------------------------------------------------ ---------------

-

1.1 Underwriting

Agreement............................................3.1 Restated Articles of

Incorporation................................ (1)3.2

Bylaws............................................................(2)

4.1 Form of Amendment to theRegistrant's Restated Articles of

Incorporation designating the rights

and preferences with respectto the Series A Preferred

Shares..................................4.2 Form of Indenture with respect to

the % ConvertibleSubordinated Preferred Notes Due

1999.............................5.1 Opinion of Preston Gates &

Ellis..................................8.1 Opinion of Preston Gates &

Ellis..................................12.1 Computation of Ratio of Earnings


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to Fixed Charges.................13.1 Quarterly and Market Information

Incorporated by Reference to Page28 of 1996 Annual Report to

Shareholders ("1996 Annual Report")...(3)

13.2 (IntentionallyOmitted)...........................................13.3 Management's Discussion andAnalysis of Financial Condition and

Results of Operations Incorporatedby Reference to Pages 16-19,

22, and 23 of 1996 AnnualReport.................................. (3)

13.4 Financial Statements Incorporated

by Reference to Pages 1, 15, 20,21, 24-29, and 31 of 1996 AnnualReport........................... (3)

23.1 Consent of Deloitte & ToucheLLP.................................. (1)23.2 Consent of Preston Gates &Ellis.................................. (4)

24.1 Power ofAttorney.................................................

II-425.1 Statement of Eligibility of

Trustee...............................

- ---------------(1) Filed previously with the Registrant's Registration Statement on Form S-3

(Commission File No. 333-17143).

(2) Incorporated by reference to Microsoft's Form 10-K for the fiscal year endedJune 30, 1994.


(4) Contained within Exhibit 5.1.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) That, for purposes of determining any liability under theSecurities Act of 1933, each filing of the registrant's annual report


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pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Actof 1934 (and, where applicable, each filing of an employee benefit plan'sannual report pursuant to Section 15(d) of the Securities Exchange Act of1934) that is incorporated by reference in the registration statement shall

be deemed to be a new registration statement relating to the securitiesoffered therein, and the offering of such securities at that time shall bedeemed to be the initial bona fide offering thereof.

(2) That the undersigned registrant hereby undertakes to deliver orcause to be delivered with the prospectus, to each person to whom theprospectus is sent or given, the latest annual report to security holdersthat is incorporated by reference in the prospectus and furnished

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pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 underthe Securities Exchange Act of 1934; and, where interim financialinformation required to be presented by Article 3 of Regulation S-X are notset forth in the prospectus, to deliver, or cause to be delivered to eachperson to whom the prospectus is sent or given, the latest quarterly reportthat is specifically incorporated by reference in the prospectus to providesuch interim financial information.

(3) That, insofar as indemnification for liabilities arising under theSecurities Act of 1933 may be permitted to directors, officers andcontrolling persons of the registrant pursuant to the foregoing provisions,

the registrant has been advised that in the opinion of the Securities andExchange Commission such indemnification is against public policy asexpressed in the Act and is, therefore, unenforceable. In the event that aclaim for indemnification against such liabilities (other than the paymentby the registrant of expenses incurred or paid by a director, officer orcontrolling person of the registrant in the successful defense of anyaction, suit or proceeding) is asserted by such director, officer orcontrolling person in connection with the securities being registered, theregistrant will, unless in the opinion of its counsel the matter has beensettled by a controlling precedent, submit to a court of appropriatejurisdiction the question whether such indemnification by it is against

public policy as expressed in the Act and will be governed by a finaladjudication of such issue.

(4) That, for purposes of determining any liability under theSecurities Act of 1933, the information omitted from the form of prospectusfiled as part of this registration statement in reliance upon Rule 430A andcontained in a form of prospectus filed by the registrant pursuant to Rule424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to bepart of this registration statement as of the time it was declaredeffective.

(5) That, for the purpose of determining any liability under the


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Securities Act of 1933, each post-effective amendment that contains a formof prospectus shall be deemed to be a new registration statement relatingto the securities offered therein, and the offering of such securities atthat time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant

certifies that it has reasonable grounds to believe that it meets all of therequirements for filing on Form S-3 and has duly caused this Amendment No. 2 toRegistration Statement to be signed on its behalf by the undersigned, thereunto

duly authorized, in the City of Redmond, State of Washington on December 16,1996.

MICROSOFT CORPORATION

/s/ MICHAEL W. BROWN

--------------------------------------Michael W. Brown,

Vice President, Finance; ChiefFinancial Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment

to registration statement has been signed below on December 16, 1996 by thefollowing persons in the capacities indicated.

SIGNATURES

TITLE

- ---------------------------------------- ----------------------

----------

/s/MICHAEL


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W. BROWNVice

President,Finance; Chief

- -------------------------------

---------FinancialOfficer

(PrincipalMichael

W. BrownFinancialand

Accounting

Officer)*

Chairman,Chief

Executive- -------------------------------

---------Officer,

Director(Principal

WilliamH. Gates

ExecutiveOfficer)

*

Director- -------------------------------

---------Paul G.

Allen*

Director- -------------------------------

---------Jill E.

Barad*


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Director

- -------------------------------

---------Richard

A. Hackborn*

Director- -------------------------------

---------David F.

Marquardt

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SIGNATURES

TITLE- ---------------

------------------------- ----------------------

----------

*

Director- -------------------------------

---------Robert

D. O'Brien

*

Director- -------------------------------

---------William

G. Reed, Jr.


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*

Director

- -------------------------------

---------Jon A.

Shirley

*By /s/MICHAEL W.

BROWN- -------------------------------

---------MichaelW. Brown

Attorney-in-

Fact

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INDEX TO EXHIBITS

EXHIBIT NO.DESCRIPTION PAGE

OR FOOTNOTE- ----------- ------------------------------------------------------------------ ---------------

-

1.1 UnderwritingAgreement............................................

3.1 Restated Articles ofIncorporation................................ (1)

3.2Bylaws............................................................

(2)4.1 Form of Amendment to theRegistrant's Restated Articles of

Incorporation designating the rightsand preferences with respect

to the Series A Preferred


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Shares..................................4.2 Form of Indenture with respect to

the % ConvertibleSubordinated Notes Due

1999.......................................5.1 Opinion of Preston Gates &

Ellis..................................8.1 Opinion of Preston Gates &

Ellis..................................12.1 Computation of Ratio of Earnings

to Fixed Charges.................13.1 Quarterly and Market Information

Incorporated by Reference to Page28 of 1996 Annual Report to

Shareholders ("1996 Annual Report")...

(3)13.2 (IntentionallyOmitted)...........................................13.3 Management's Discussion andAnalysis of Financial Condition and

Results of Operations Incorporatedby Reference to Pages 16-19,

22, and 23 of 1996 AnnualReport.................................. (3)

13.4 Financial Statements Incorporatedby Reference to Pages 1, 15, 20,

21, 24-29, and 31 of 1996 Annual

Report........................... (3)23.1 Consent of Deloitte & ToucheLLP.................................. (1)23.2 Consent of Preston Gates &Ellis.................................. (4)

24.1 Power ofAttorney.................................................

II-425.1 Statement of Eligibility of

Trustee...............................

- ---------------(1) Filed previously with the Registrant's Registration Statement on Form S-3

(Commission File No. 333-17143).


(3) Incorporated by reference to Microsoft's Form 10-K for the fiscal year ended


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June 30, 1996.

(4) Contained within Exhibit 5.1.

EX-1.12UNDERWRITING AGREEMENT

1EXHIBIT 1.1


__% CONVERTIBLE EXCHANGEABLEPRINCIPAL-PROTECTED

PREFERRED SHARES, SERIES A(PAR VALUE $0.01 PER SHARE)

------------------

UNDERWRITING AGREEMENT

December ___, 1996

Goldman, Sachs & Co.,Morgan Stanley & Co. Incorporated,As representatives ofthe several Underwritersnamed in Schedule I hereto,85 Broad Street,New York, New York 10004.

Ladies and Gentlemen:

Microsoft Corporation, a Washington corporation (the "Company"),


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proposes, subject to the terms and conditions stated herein, to issue and sellto the Underwriters named in Schedule I hereto (the "Underwriters") an aggregateof __________, and, at the election of the Underwriters up to __________additional, __% Convertible Exchangeable Principal-Protected Preferred Shares,

Series A, par value $0.01 per share, of the Company (the "Series A PreferredShares"), convertible at the Company's election at maturity into common shares,par value $0.000025 per share, of the Company (the "Common Shares") or at theoption of the Company exchangeable into the Company's ___% ConvertibleSubordinated Notes due 1999 (the "Convertible Notes"), which at the holder'selection convert at maturity into the right to receive an amount ofconsideration payable, at the Company's option, in either cash or Common Shares.The aggregate of __________ Series A Preferred Shares to be sold by the Companyis herein called the "Firm Shares" and the aggregate of __________ additionalSeries A Preferred Shares to be sold by the Company is herein called the"Optional Shares." The Firm Shares and the Optional Shares which the

Underwriters elect to purchase pursuant to Section 2 hereof are hereincollectively called the "Shares".2

1. The Company represents and warrants to, and agrees with, each ofthe Underwriters that:

(a) A registration statement on Form S-3 (File No. 333-17143)(the "Initial Registration Statement") in respect of the Shares, theConvertible Notes and Common Shares that may be issuable uponconversion of the Shares or the Convertible Notes has been filed withthe Securities and Exchange Commission (the "Commission") under theSecurities Act of 1933, as amended (the "Act"); the Initial

Registration Statement and any post-effective amendment thereto, eachin the form heretofore delivered to you, and, excluding exhibits tosuch registration statement, to you for each of the other Underwriters,have been declared effective by the Commission in such form; no otherdocument (other than (i) the pre-effective amendments thereto and (ii)a registration statement, if any, increasing the size of the offering(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)under the Act, which became effective upon filing), with respect to theInitial Registration Statement has heretofore been filed with theCommission; and no stop order suspending the effectiveness of theInitial Registration Statement, any post-effective amendment thereto or

the Rule 462(b) Registration Statement, if any, has been issued and noproceeding for that purpose has been initiated or threatened by theCommission (any preliminary prospectus included in the InitialRegistration Statement or filed with the Commission pursuant to Rule424(a) of the rules and regulations of the Commission under the Act,including any document or information incorporated therein byreference, is hereinafter called a "Preliminary Prospectus"; thevarious parts of the Initial Registration Statement and the Rule 462(b)Registration Statement, if any, including all exhibits thereto andincluding information contained in the form of final prospectus filedwith the Commission pursuant to Rule 424(b) under the Act in accordancewith Section 5(a) hereof and deemed by virtue of Rule 430A under the


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Act to be part of the Initial Registration Statement at the time it wasdeclared effective or such part of the Rule 462(b) RegistrationStatement, if any, became or hereafter becomes effective , each asamended at the time such part of the registration statement became

effective, are hereinafter collectively called the "RegistrationStatement"; and such final prospectus, in the form first filed pursuantto Rule 424(b) under the Act, including any document or informationincorporated therein by reference, is hereinafter called the"Prospectus");

(b) No order preventing or suspending the use of anyPreliminary Prospectus has been issued by the Commission, and eachPreliminary Prospectus, at the time of filing thereof, conformed in allmaterial respects to the requirements of the Act and the rules andregulations of the Commission thereunder, and did not contain an untrue

statement of a material fact or omit to state a material fact requiredto be stated therein or necessary to make the statements therein, inthe light of the circumstances under which they were made, notmisleading; provided, however, that this representation and warrantyshall not apply to any statements or omissions made in reliance uponand in conformity with information furnished in writing to the Companyby an Underwriter through Goldman, Sachs & Co. expressly for usetherein;

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(c) The documents incorporated by reference in the Prospectus,

when they became effective or were filed with the Commission, as thecase may be, conformed in all material respects to the requirements ofthe Act or the Securities Exchange Act of 1934, as amended (the"Exchange Act"), as applicable, and the rules and regulations of theCommission thereunder, and none of such documents contained an untruestatement of a material fact or omitted to state a material factrequired to be stated therein or necessary to make the statementstherein not misleading; and any further documents so filed andincorporated by reference in the Prospectus or any further amendment orsupplement thereto, when such documents become effective or are filedwith the Commission, as the case may be, will conform in all material

respects to the requirements of the Act or the Exchange Act, asapplicable, and the rules and regulations of the Commission thereunder,and will not contain an untrue statement of a material fact or omit tostate a material fact required to be stated therein or necessary tomake the statements therein not misleading; provided, however, thatthis representation and warranty shall not apply to any statements oromissions made in reliance upon and in conformity with informationfurnished in writing to the Company by an Underwriter through Goldman,Sachs & Co. expressly for use therein;

(d) The Registration Statement conforms, and the Prospectusand any further amendments or supplements to the Registration Statement


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or the Prospectus will conform, in all material respects to therequirements of the Act and the rules and regulations of the Commissionthereunder and do not and will not, as of the applicable effective dateas to the Registration Statement and any amendment thereto, and as to

the applicable filing date as to the Prospectus and any amendment orsupplement thereto, contain an untrue statement of a material fact oromit to state a material fact required to be stated therein ornecessary to make the statements therein not misleading; provided,however, that this representation and warranty shall not apply to anystatements or omissions made in reliance upon and in conformity withinformation furnished in writing to the Company by an Underwriterthrough Goldman, Sachs & Co. expressly for use therein;

(e) Neither the Company nor any of its "SignificantSubsidiaries" (as defined in Regulation S-X under the Act) has

sustained since the date of the latest audited financial statementsincluded or incorporated by reference in the Prospectus any materialloss or interference with its business from fire, explosion, flood orother calamity, whether or not covered by insurance, or from any labordispute or court or governmental action, order or decree, otherwisethan as set forth or contemplated in the Prospectus; and, since therespective dates as of which information is given in the RegistrationStatement and the Prospectus, there has not been any change in thecapital shares or long-term debt of the Company or any of itsSignificant Subsidiaries or any material adverse change, or anydevelopment involving a prospective material adverse change, in oraffecting the general affairs, management, financial

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position, shareholders' equity or results of operations of the Companyor any of its Significant Subsidiaries (a "Material Adverse Effect"),otherwise than as set forth or contemplated in the Prospectus;

(f) The Company has been duly incorporated and is validlyexisting as a corporation under the laws of the State of Washington,with power and authority (corporate and other) to own its propertiesand conduct its business as described in the Prospectus, and has been

duly qualified as a foreign corporation for the transaction of businessand is in good standing under the laws of each other jurisdiction inwhich it owns or leases properties, or conducts any business, so as torequire such qualification, or is subject to no material liability ordisability by reason of the failure to be so qualified in any suchjurisdiction; and each Significant Subsidiary of the Company has beenduly incorporated and is validly existing as a corporation in goodstanding (where the concept of good standing is applicable) under thelaws of its jurisdiction of incorporation;

(g) The Company has an authorized capitalization as set forthin the Prospectus, and all of the issued capital shares of the Company


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have been duly and validly authorized and issued, and are fully paidand non-assessable; the Common Shares initially issuable uponconversion of the Shares or the Convertible Notes have been duly andvalidly authorized and reserved for issuance and, when issued and

delivered in accordance with the provisions of the Shares or theConvertible Notes and the Indenture referred to below, will be duly andvalidly issued, fully paid and non-assessable, and will conform to thedescription of the Common Shares contained in the Prospectus; and allof the issued capital shares of each Significant Subsidiary of theCompany have been duly and validly authorized and issued, are fullypaid and non-assessable, and (except for directors' qualifying sharesand except as set forth in the Prospectus) are owned directly orindirectly by the Company, free and clear of all liens, encumbrances,equities or claims;

(h) The Shares have been duly and validly authorized and whenissued and delivered against payment therefor as provided herein, willbe duly and validly issued, fully paid and non-assessable, and willconform to the description of the Series A Preferred Shares containedin the Prospectus;

(i) The Convertible Notes have been duly authorized and, whenissued and delivered upon exchange of the Shares, will have been dulyexecuted, authenticated, issued and delivered and will constitute validand legally binding obligations of the Company entitled to the benefitsprovided by the indenture to be dated as of December ..., 1996 (the"Indenture") between the Company and Citibank N.A., as Trustee (the

"Trustee"), under which they are to be issued, which will besubstantially in the form filed as an exhibit to the RegistrationStatement; the Indenture has been duly authorized and qualified underthe Trust Indenture Act and, when executed and delivered by the

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Company and the Trustee, the Indenture will constitute a valid andlegally binding instrument, enforceable in accordance with its terms,subject, as to enforcement, to bankruptcy, insolvency, reorganizationand other laws of general applicability relating to or affecting

creditors' rights and to general equity principles; and the ConvertibleNotes and the Indenture will conform to the descriptions thereofcontained in the Prospectus in all material respects;

(j) The issue and sale of the Shares by the Company and thecompliance by the Company with all of the provisions of this Agreementand the consummation of the transactions contemplated will not resultin a breach or violation of any of the terms or provisions of, orconstitute a default under, any material indenture, mortgage, deed oftrust, loan agreement or other material agreement or instrument towhich the Company or any of its Significant Subsidiaries is a party orby which the Company or any of its subsidiaries is bound or to which


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any of the property or assets of the Company or any of its SignificantSubsidiaries is subject, nor will such action result in any violationof the provisions of the Restated Articles of Incorporation or By-lawsof the Company or any statute or any order, rule or regulation of any

court or governmental agency or body having jurisdiction over theCompany or any of its subsidiaries or any of their properties; and noconsent, approval, authorization, order, registration or qualificationof or with any such court or governmental agency or body is requiredfor the issue and sale of the Shares or the consummation by the Companyof the transactions contemplated by this Agreement, except theregistration under the Act of the Shares, the Convertible Notes and theCommon Shares issuable upon conversion of the Shares or the ConvertibleNotes;

(k) Neither the Company nor any of its Significant

Subsidiaries is in violation of its Restated Articles of Incorporationor other charter instrument or By-laws or in default in the performanceor observance of any material obligation, agreement, covenant orcondition contained in any indenture, mortgage, deed of trust, loanagreement, lease or other agreement or instrument to which it is aparty or by which it or any of its properties may be bound;

(l) The statements set forth in the Prospectus under thecaption "Description of Series A Preferred Shares", "Description ofConvertible Notes", and "Description of Capital Shares", insofar asthey purport to constitute a summary of the terms of the Series APreferred Shares, the Convertible Notes and the Common Shares,

respectively, and under the captions "Certain U.S. Federal Income TaxConsiderations" and "Underwriting", insofar as they purport to describethe provisions of the laws, legal proceedings, and documents referredto therein, are accurate, complete and fair in all material respects;

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(m) Other than as set forth in the Prospectus, there are nolegal or governmental proceedings pending to which the Company or anyof its subsidiaries is a party or of which any property of the Company

or any of its subsidiaries is the subject which, if determinedadversely to the Company or any of its subsidiaries, would individuallyor in the aggregate have a Material Adverse Effect; and, to the best ofthe Company's knowledge, no such proceedings are threatened orcontemplated by governmental authorities or threatened by others;

(n) The Company is not and, after giving effect to theoffering and sale of the Shares, will not be an "investment company" oran entity "controlled" by an "investment company," as such terms aredefined in the Investment Company Act of 1940, as amended (the"Investment Company Act");


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(o) Deloitte & Touche LLP, who have certified certainfinancial statements of the Company and its subsidiaries, areindependent public accountants as required by the Act and the rules andregulations of the Commission thereunder; and

(p) The Company and its Significant Subsidiaries own orpossess valid licenses or other rights to use all patents, trademarks,service marks, trade names, copyrights, know-how and trade secretsnecessary to conduct the business of the Company and its SignificantSubsidiaries in the manner in which it has been and is being conducted,and except as set forth in the Prospectus neither the Company nor anyof its Significant Subsidiaries has received any notice of infringementof or conflict with (and knows of no such infringement of or conflictwith) asserted rights of others with respect to any patents,trademarks, service marks, trade names, copyrights, know-how or trade

secrets which, if determined adversely to the Company or any of itsSignificant Subsidiaries, would individually or in the aggregate have aMaterial Adverse Effect; and the inventions, products or processesreferred to in the Prospectus do not, to the best knowledge of theCompany, infringe or conflict with any right or patent, or anyinvention, product or process which is the subject of a patentapplication known to the Company, which if determined adversely wouldhave a Material Adverse Effect.

Subject to the terms and conditions herein set forth, (a) the Companyagrees to issue and sell to each of the Underwriters, and each of theUnderwriters agrees, severally and not jointly, to purchase from the Company, at

a purchase price per share of $................., the number of Firm Shares setforth opposite the name of such Underwriter in Schedule I hereto and (b) in theevent and to the extent that the Underwriters shall exercise the election topurchase Optional Shares as provided below, the Company agrees to issue and sellto each of the Underwriters, and each of the Underwriters agrees, severally andnot jointly, to purchase from the Company, at the purchase price per share setforth in clause (a) of this Section 2, that portion of

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the number of Optional Shares as to which such election shall have beenexercised (to be adjusted by you so as to eliminate fractional shares)determined by multiplying such number of Optional Shares by a fraction, thenumerator of which is the maximum number of Optional Shares which suchUnderwriter is entitled to purchase as set forth opposite the name of suchUnderwriter in Schedule I hereto and the denominator of which is the maximumnumber of Optional Shares that all of the Underwriters are entitled to purchasehereunder.

The Company hereby grants to the Underwriters the right to purchase attheir election up to ................. Optional Shares, at the purchase priceper share set forth in the paragraph above, for the sole purpose of covering


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overallotments in the sale of the Firm Shares. Any such election to purchaseOptional Shares may be exercised only by written notice from you to the Company,given within a period of 30 calendar days after the date of this Agreement,setting forth the aggregate number of Optional Shares to be purchased and the

date on which such Optional Shares are to be delivered, as determined by you butin no event earlier than the First Time of Delivery (as defined in Section 4hereof) or, unless you and the Company otherwise agree in writing, earlier thantwo or later than ten business days after the date of such notice.

3. Upon the authorization by you of the release of the Firm Shares, theseveral Underwriters propose to offer the Firm Shares for sale upon the termsand conditions set forth in the Prospectus.

4. (a) The Shares to be purchased by each Underwriter hereunder, indefinitive form, and in such authorized denominations and registered in such

names as Goldman, Sachs & Co. may request upon at least forty-eight hours' priornotice to the Company shall be delivered by or on behalf of the Company toGoldman, Sachs & Co., for the account of such Underwriter, against payment by oron behalf of such Underwriter of the purchase price therefor by wire transfer,payable to the order of the Company in federal (same-day) funds. The Companywill cause the certificates representing the Shares to be made available forchecking and packaging at least twenty-four hours prior to the Time of Delivery(as defined below) with respect thereto at the office of Goldman, Sachs & Co.,85 Broad Street, New York, New York 10004 (the "Designated Office"). The timeand date of such delivery and payment shall be, with respect to the Firm Shares,10:00 a.m., New York time, on December ___, 1996 or such other time and date asGoldman, Sachs & Co. and the Company may agree upon in writing, and, with

respect to the Optional Shares, 10:00 a.m., New York time, on the date specifiedby Goldman, Sachs & Co. in the written notice given by Goldman, Sachs & Co. ofthe Underwriters' election to purchase such Optional Shares pursuant to Section2 hereof, or such other time and date as Goldman, Sachs & Co. and the Companymay agree upon in writing. Such time and date for delivery of the Firm Shares isherein called the "First Time of Delivery", such time and date for delivery ofthe Optional Shares, if not the First Time of Delivery, is herein called the"Second Time of Delivery", and each such time and date for delivery is hereincalled a "Time of Delivery".

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(b) The documents to be delivered at each Time of Delivery byor on behalf of the parties hereto pursuant to Section 7 hereof,including the cross-receipt for the Shares and any additional documentsrequested by the Underwriters pursuant to Section 7(i) hereof, will bedelivered at the offices of Preston Gates & Ellis, 701 Fifth Avenue,Seattle, Washington 98104 (the "Closing Location"), and the Shares willbe delivered at the Designated Office, all at each Time of Delivery. Ameeting will be held at the Closing Location at 12:00 p.m., SeattleCity time, on the New York Business Day next preceding each Time ofDelivery, at which meeting the final drafts of the documents to be


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delivered pursuant to the preceding sentence will be available forreview by the parties hereto. For the purposes of this Section 4, "NewYork Business Day" shall mean each Monday, Tuesday, Wednesday, Thursdayand Friday which is not a day on which banking institutions in New York

are generally authorized or obligated by law or executive order toclose.

5. The Company agrees with each of the Underwriters:

(a) To prepare the Prospectus in a form approved by you and tofile such Prospectus pursuant to Rule 424(b) under the Act not laterthan the Commission's close of business on the second business dayfollowing the execution and delivery of this Agreement, or, ifapplicable, such earlier time as may be required by Rule 430A(a)(3)under the Act; to make no further amendment or any supplement to the

Registration Statement or Prospectus which shall be disapproved by youpromptly after reasonable notice thereof; to advise you, promptly afterit receives notice thereof, of the time when any amendment to theRegistration Statement has been filed or becomes effective or anysupplement to the Prospectus or any amended Prospectus has been filedand to furnish you ______ copies thereof; to advise you, promptly afterit receives notice thereof, of the issuance by the Commission of anystop order or of any order preventing or suspending the use of anyPreliminary Prospectus or prospectus, of the suspension of thequalification of the Shares or the Convertible Notes or the CommonShares issuable upon conversion of the Shares or the Convertible Notesfor offering or sale in any jurisdiction, of the initiation or

threatening of any proceeding for any such purpose, or of any requestby the Commission for the amending or supplementing of the RegistrationStatement or Prospectus or for additional information; and, in theevent of the issuance of any stop order or of any order preventing orsuspending the use of any Preliminary Prospectus or prospectus orsuspending any such qualification, promptly to use its best efforts toobtain the withdrawal of such order;

(b) Promptly from time to time to take such action as you mayreasonably request to qualify the Shares or the Convertible Notes orthe Common Shares issuable upon conversion of the Shares or the

Convertible Notes for offering and sale under the securities laws ofsuch jurisdictions as you may request and to comply with such laws soas to permit the continuance of sales and dealings therein in suchjurisdictions for as long as

8

9may be necessary to complete the distribution of the Shares, providedthat in connection therewith the Company shall not be required by theUnderwriters to qualify as a foreign corporation or to file a generalconsent to service of process in any jurisdiction;


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(c) Prior to 10:00 a.m., New York City time, on the New YorkBusiness Day next succeeding the date of this Agreement and from timeto time, to furnish the Underwriters with copies of the Prospectus in

New York City in such quantities as you may reasonably request, and, ifthe delivery of a prospectus is required at any time prior to theexpiration of nine months after the time of issue of the Prospectus inconnection with the offering or sale of the Shares or the ConvertibleNotes or the Common Shares issuable upon conversion of the Shares orthe Convertible Notes and if at such time any event shall haveoccurred as a result of which the Prospectus as then amended orsupplemented would include an untrue statement of a material fact oromit to state any material fact necessary in order to make thestatements therein, in the light of the circumstances under which theywere made when such Prospectus is delivered, not misleading, or, if for

any other reason it shall be necessary during such period to amend orsupplement the Prospectus or to file under the Exchange Act anydocument incorporated by reference in the Prospectus in order to complywith the Act or the Exchange Act, to notify you and upon your requestto file such document and to prepare and furnish without charge to eachUnderwriter and to any dealer in securities as many copies as you mayfrom time to time reasonably request of an amended Prospectus or asupplement to the Prospectus which will correct such statement oromission or effect such compliance, and in case any Underwriter isrequired to deliver a prospectus in connection with sales of any of theShares, the Convertible Notes or the Common Shares issuable uponconversion of the Shares or the Convertible Notes at any time nine

months or more after the time of issue of the Prospectus, upon yourrequest but at the expense of such Underwriter, to prepare and deliverto such Underwriter as many copies as you may request of an amended orsupplemented Prospectus complying with Section 10(a)(3) of the Act;

(d) To make generally available to its securityholders as soonas practicable, but in any event not later than eighteen months afterthe effective date of the Registration Statement (as defined in Rule158(c) under the Act), an earnings statement of the Company and itssubsidiaries (which need not be audited) complying with Section 11(a)of the Act and the rules and regulations of the Commission thereunder

(including, at the option of the Company, Rule 158);

(e) During the period beginning from the date hereof andcontinuing to and including the date 90 days after the date of theProspectus, not to offer, sell, contract to sell or otherwise disposeof, except as provided hereunder, any securities of the Company (otherthan (A) in connection with

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the acquisition of an enterprise or tangible or intangible propertyother than cash where the securities of the Company so disposed of (i)


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are not more than two percent of the aggregate of the outstandingCommon Shares and Common Shares issuable upon conversion or exercise ofrights pursuant to other outstanding securities, including the Series APreferred Shares and employee stock options, (ii) are "restricted

securities" as defined in Rule 144 of the Act, or (iii) are transferredto one or more persons who agree in a writing reasonably acceptable toGoldman, Sachs & Co. not to dispose of such securities during thebalance of the 90-day period after the date of this Prospectus, or (B)pursuant to existing employee stock option and purchase plans or (C) onthe conversion or exchange of convertible or exchangeable securitiesoutstanding on the date hereof) which are substantially similar to theShares or the Common Shares, or securities which are convertible intoor exchangeable for, or that represent the right to receive, Shares orCommon Shares or any substantially similar securities, without yourprior written consent, except for the Shares offered in the Prospectus;

(f) During a period of five years from the effective date ofthe Registration Statement, to furnish to you such additionalinformation concerning the business and financial condition of theCompany as you may from time to time reasonably request;

(g) To use the net proceeds received by it from the sale ofthe Shares pursuant to this Agreement in the manner specified in theProspectus under the caption "Use of Proceeds";

(h) To use its best efforts to list, subject to notice ofissuance, the Shares and the Convertible Notes, and the Common Shares

issuable upon conversion of the Shares or the Convertible Notes, on theNational Association of Securities Dealers Automated QuotationsNational Market("Nasdaq");

(i) To reserve and keep available at all times, free ofpreemptive rights, Common Shares for the purpose of enabling theCompany to satisfy any obligations to issue Common Shares uponconversion of the Shares or the Convertible Notes; and

(j) If the Company elects to rely upon Rule 462(b), the

Company shall file a Rule 462(b) Registration Statement with theCommission in compliance with Rule 462(b) by 10:00 P.M., Washington,D.C. time, on the date of this Agreement, and the Company shall at thetime of filing either pay to the Commission the filing fee for the Rule462(b) Registration Statement or give irrevocable instructions for thepayment of such fee pursuant to Rule 111(b) under the Act.

6. The Company covenants and agrees with the several Underwriters thatthe Company will pay or cause to be paid the following: (i) the fees,disbursements and expenses of the Company's counsel and accountants inconnection with the registration of the Shares, the Convertible Notes and theCommon Shares issuable


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upon conversion of the Shares or the Convertible Notes under the Act and all

other expenses in connection with the preparation, printing and filing of theRegistration Statement, any Preliminary Prospectus and the Prospectus andamendments and supplements thereto and the mailing and delivering of copiesthereof to the Underwriters and dealers; (ii) the cost of printing or producingany Agreement among Underwriters, this Agreement, any Blue Sky Memoranda,closing documents (including any compilations thereof) and any other documentsin connection with the offering, purchase, sale and delivery of the Shares;(iii) all expenses in connection with the qualification of the Shares, theConvertible Notes and the Common Shares issuable upon conversion of the Sharesor the Convertible Notes for offering and sale under state securities laws asprovided in Section 5(b) hereof, including the fees and disbursements of counsel

for the Underwriters in connection with such qualification and in connectionwith any Blue Sky surveys; (iv) all fees and expenses in connection with listingthe Shares and the Convertible Notes on Nasdaq; (v) the filing fees incident to,and the fees and disbursements of counsel for the Underwriters in connectionwith, securing any required review by the National Association of SecuritiesDealers, Inc. of the terms of the sale of the Shares; (vi) the cost of preparingstock certificates and the Convertible Notes; (vii) the cost and charges of anytransfer agent or registrar; (viii) the fees and expenses of the Trustee and anyagent of the Trustee and the fees and disbursements of counsel for the Trusteein connection with the Indenture and the Convertible Notes; and (ix) all othercosts and expenses incident to the performance of its obligations hereunderwhich are not otherwise specifically provided for in this Section . It is

understood, however, that, except as provided in this Section, and Sections 8and 11 hereof, the Underwriters will pay all of their own costs and expenses,including the fees of their counsel, stock transfer taxes on resale of any ofthe Shares by them, and any advertising expenses connected with any offers theymay make.

7. The obligations of the Underwriters hereunder, as to the Shares tobe delivered at each Time of Delivery, shall be subject, in their discretion, tothe condition that all representations and warranties and other statements ofthe Company herein are, at and as of such Time of Delivery, true and correct,the condition that the Company shall have performed all of its obligations

hereunder theretofore to be performed, and the following additional conditions:

(a) The Prospectus shall have been filed with the Commissionpursuant to Rule 424(b) within the applicable time period prescribedfor such filing by the rules and regulations under the Act and inaccordance with Section 5(a) hereof; if the Company has elected to relyupon Rule 462(b), the Rule 462(b) Registration Statement shall havebecome effective by 10:00 p.m., Washington, D.C. time, on the date ofthis Agreement; no stop order suspending the effectiveness of theRegistration Statement or any part thereof shall have been issued andno proceeding for that purpose shall have been initiated or threatenedby the Commission; and all requests for additional information on the


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part of the Commission shall have been complied with to your reasonablesatisfaction;

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(b) Sullivan & Cromwell, counsel for the Underwriters, shallhave furnished to you such opinion or opinions, dated such Time ofDelivery, with respect to the incorporation of the Company, thevalidity of the Indenture, the Shares, the Convertible Notes and theCommon Shares issuable upon conversion of such Shares or theConvertible Notes, the Registration Statement, the Prospectus, andother related matters as you may reasonably request, and such counselshall have received such papers and information as they may reasonablyrequest to enable them to pass upon such matters; in giving such

opinion or opinions, such counsel may rely as to all matters ofWashington law upon the opinion of Preston Gates & Ellis referred to inparagraph (c) of this Section 7;

(c) Preston Gates & Ellis, counsel for the Company, shall havefurnished to you their written opinion (a draft of such opinion isattached as Annex II(a) hereto), dated such Time of Delivery, in formand substance satisfactory to you, to the effect that:

(i) The Company has been duly incorporated and isvalidly existing as a corporation under the laws of the Stateof Washington, with corporate power and authority to own its

properties and conduct its business as described in theProspectus;

(ii) The Company has an authorized capitalization asset forth in the Prospectus, and all of the Shares have beenduly and validly authorized and when issued will be fully paidand non-assessable, and the Common Shares initially issuableupon conversion of the Shares or the Convertible Notes havebeen duly and validly authorized and reserved for issuanceand, when issued and delivered in accordance with theprovisions of the Shares or the Convertible Notes and the

Indenture, will be duly and validly issued, fully paid andnon-assessable, and the Shares conform, and the ConvertibleNotes and Common Shares will conform, to the descriptionsthereof contained in the Prospectus;

(iii) The Company has been duly qualified as aforeign corporation for the transaction of business and is ingood standing under the laws of each other jurisdiction inwhich it owns or leases properties, or conducts any business,so as to require such qualification, or is subject to nomaterial liability or disability by reason of failure to be soqualified in any such jurisdiction (such counsel being


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entitled to rely in respect of the opinion in this clause uponopinions of local counsel and in respect of matters of factupon certificates of public officials or officers of theCompany, provided that such counsel shall state that they

believe that both you and they are justified in relying uponsuch opinions and certificates);

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(iv) Each Significant Subsidiary of the Company hasbeen duly incorporated and is validly existing as acorporation in good standing under the laws of itsjurisdiction of incorporation; and all of the issued shares ofcapital stock of each such subsidiary have been duly and

validly authorized and issued, are fully paid andnon-assessable, and (except for directors' qualifying sharesand except as otherwise set forth in the Prospectus) are owneddirectly or indirectly by the Company, free and clear of allliens, encumbrances, equities or claims (such counsel beingentitled to rely in respect of the opinion in this clause uponopinions of local counsel and in respect of matters of factupon certificates of public officials or officers of theCompany or its Significant Subsidiaries, provided that suchcounsel shall state that they believe that both you and theyare justified in relying upon such opinions and certificates);

(v) To the best of such counsel's knowledge andother than as set forth or contemplated in the Prospectus,there are no legal or governmental proceedings pending towhich the Company or any of its subsidiaries is a party or ofwhich any property of the Company or any of its subsidiariesis the subject which, if determined adversely to the Companyor any of its subsidiaries, would individually or in theaggregate have a Material Adverse Effect; and, to the best ofsuch counsel's knowledge, no such proceedings are threatenedor contemplated by governmental authorities or threatened byothers;

(vi) This Agreement has been duly authorized,executed and delivered by the Company;

(vii) The issue and sale of the Shares beingdelivered at such Time of Delivery by the Company and thecompliance by the Company with all of the provisions of thisAgreement and the Indenture and the consummation of thetransactions herein contemplated will not result in a breachor violation of any of the terms or provisions of, orconstitute a default under, any material indenture, mortgage,deed of trust, loan agreement or other material agreement or


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instrument known to such counsel to which the Company or anyof its subsidiaries is a party or by which the Company or anyof its subsidiaries is bound or to which any of the propertyor assets of the Company or any of its subsidiaries is

subject, nor will such action result in any violation of theprovisions of the Restated Articles of Incorporation orBy-laws of the Company or any statute or any order, rule orregulation known to such counsel of any court or governmentalagency or body having jurisdiction over the Company or any ofits subsidiaries or any of their properties;

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(viii) The Convertible Notes have been duly authorized

by the Company, and, when executed by the Company andauthenticated by the Trustee in accordance with the terms ofthe Indenture and delivered upon exchange of the Shares, willconstitute valid and legally binding obligations of theCompany entitled to the benefits provided by the Indenture;and the Convertible Notes and the Indenture conform to thedescriptions thereof in the Prospectus; the Indenture has beenduly authorized by the Company, duly executed and delivered bythe Company and the Trustee and constitutes a valid andlegally binding instrument, enforceable in accordance with itsterms, subject, as to enforcement, to bankruptcy, insolvency,reorganization and other laws of general applicability

relating to or affecting creditors' rights and to generalequity principles; and the Indenture has been duly qualifiedunder the Trust Indenture Act;

(ix) No consent, approval, authorization, order,registration or qualification of or with any such court orgovernmental agency or body is required for the issue and saleof the Shares or the consummation by the Company of thetransactions contemplated by this Agreement except for theregistration under the Act of the Shares, the ConvertibleNotes and the Common Shares issuable upon conversion of the

Shares or the Convertible Notes;

(x) Neither the Company nor any of its SignificantSubsidiaries is (a) in violation of its Restated Certificateof Incorporation or any other charter instrument, or By-lawsor (b) in default in the performance or observance of anymaterial obligation, agreement, covenant or conditioncontained in any indenture, mortgage, deed of trust, loanagreement, lease or other agreement or instrument, known tosuch counsel, to which it is a party or by which it or any ofits properties may be bound, except, in the case of thisclause (b), for defaults that individually or in the aggregate


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would not have a Material Adverse Effect;

(xi) The statements set forth in the Prospectusunder the captions "Description of Series A Preferred Shares",

"Description of Convertible Notes", and "Description ofCapital Shares", insofar as they purport to constitute asummary of the terms of the Shares, the Convertible Notes andthe Common Shares issuable upon conversion of the Shares orthe Convertible Notes, under the caption "Certain U.S. FederalIncome Tax Considerations" and under the caption"Underwriting" insofar as they purport to describe provisionsof the laws and documents referred to therein, are accurate,complete and fair in all material respects;

1415(xii) The Company is not an "investment company" or

an entity "controlled" by an "investment company," as suchterms are defined in the Investment Company Act;

(xiii) The documents incorporated by reference in theProspectus or any further amendment or supplement thereto madeby the Company prior to such Time of Delivery (other than thefinancial statements and related schedules therein, as towhich such counsel need express no opinion), when they becameeffective or were filed with the Commission, as the case may

be, complied as to form in all material respects with therequirements of the Act, or the Exchange Act, as applicable,and the rules and regulations of the Commission thereunder.

In addition, such counsel shall state that nothing hascome to their attention that would cause them to believe that,when such documents became effective or were so filed, as thecase may be, contained, in the case of a registrationstatement which became effective under the Act, an untruestatement of a material fact or omitted to state a materialfact required to be stated therein or necessary to make the

statements therein not misleading, or, in the case of otherdocuments which were filed under the Exchange Act with theCommission, an untrue statement of a material fact or omittedto state a material fact necessary in order to make thestatements therein, in the light of the circumstances underwhich they were made when such documents were so filed, notmisleading;

(xiv) The Registration Statement and the Prospectusand any further amendments and supplements thereto made by theCompany prior to such Time of Delivery (other than thefinancial statements and related schedules therein, as to


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which such counsel need express no opinion) comply as to formin all material respects with the requirements of the Act andthe rules and regulations thereunder.

Although they do not assume any responsibility for theaccuracy, completeness or fairness of the statements containedin the Registration Statement or the Prospectus, except forthose referred to in the opinion in subsection (xi) of thissection 7(c), such counsel shall state that nothing has cometo their attention that would cause them to believe that, asof its effective date, the Registration Statement or anyfurther amendment thereto made by the Company prior to suchTime of Delivery (other than the financial statements andrelated schedules therein, as to which such counsel needexpress no belief) contained an untrue statement of a material

fact or omitted to state a material fact required to be statedtherein or necessary to make the statements therein notmisleading or that, as of its date, the Prospectus or any

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further amendment or supplement thereto made by the Companyprior to such Time of Delivery (other than the financialstatements and related schedules therein, as to which suchcounsel need express no belief) contained an untrue statementof a material fact or omitted to state a material factnecessary to make the statements therein, in the light of the

circumstances under which they were made, not misleading orthat, as of such Time of Delivery, either the RegistrationStatement or the Prospectus or any further amendment orsupplement thereto made by the Company prior to such Time ofDelivery (other than the financial statements and relatedschedules therein, as to which such counsel need express nobelief) contains an untrue statement of a material fact oromits to state a material fact necessary to make thestatements therein, in the light of the circumstances underwhich they were made, not misleading; and, other than one ormore post-effective amendments to the Registration Statement

containing the form of Restated Articles of Incorporation ofthe Company as filed with the State of Washington and the formof completed Indenture, they do not know of any amendment tothe Registration Statement required to be filed or anycontracts or other documents of a character required to befiled as an exhibit to the Registration Statement or requiredto be described in the Registration Statement or theProspectus which are not filed or described as required.

(d) On the date of the Prospectus at a time prior to theexecution of this Agreement, at 9:30 a.m., New York City time, on theeffective date of any post-effective amendment to the Registration


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Statement filed subsequent to the date of this Agreement and also ateach Time of Delivery, Deloitte & Touche LLP shall have furnished toyou a letter or letters, dated the respective dates of deliverythereof, in form and substance satisfactory to you, to the effect set

forth in Annex I hereto (the executed copy of the letter deliveredprior to the execution of this Agreement is attached as Annex I(a)hereto and a draft of the form of letter to be delivered on theeffective date of any post-effective amendment to the RegistrationStatement and as of each Time of Delivery is attached as Annex II(b)hereto);

(e) (i) Neither the Company nor any of its SignificantSubsidiaries shall have sustained since the date of the latest auditedfinancial statements included in the Prospectus any loss orinterference with its business from fire, explosion, flood or other

calamity, whether or not covered by insurance, or from any labordispute or court or governmental action, order or decree, otherwisethan as set forth or contemplated in the Prospectus, and (ii) since therespective dates as of which information is given in the Prospectusthere shall not have been any change in the capital shares or long termdebt of the Company or any of its Significant Subsidiaries or anychange, or any development involving a prospective change, in oraffecting the general affairs, management, financial position,shareholders' equity or results of operations of the Company and itsSignificant Subsidiaries, otherwise than as set forth or contemplatedin the Prospectus, the effect of which, in any such case described inClause (i) or (ii), is in the judgment of Goldman, Sachs & Co. so

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material and adverse as to make it impracticable or inadvisable toproceed with the public offering or the delivery of the Shares beingdelivered at such Time of Delivery on the terms and in the mannercontemplated in the Prospectus;

(f) On or after the date hereof there shall not have occurredany of the following: (i) a suspension or material limitation in

trading in securities generally on the New York Stock Exchange or onthe Nasdaq National Market; (ii) a suspension or material limitation intrading in the Company's securities on the Nasdaq National Market;(iii) a general moratorium on commercial banking activities declared byeither Federal or New York State authorities; or (iv) the outbreak orescalation of hostilities involving the United States or thedeclaration by the United States of a national emergency or war, if theeffect of any such event specified in this Clause (iv) in the judgmentof Goldman, Sachs & Co. makes it impracticable or inadvisable toproceed with the public offering or the delivery of the Shares beingdelivered at such Time of Delivery on the terms and in the mannercontemplated in the Prospectus;


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(g) The Company shall have complied with the provisions ofSection 5(c) hereof with respect to the furnishing of copies of theProspectus;

(h) The Shares to be sold at such Time of Delivery shallhave been duly listed for quotation on Nasdaq, subject to notice ofissuance; and

(i) The Company shall have furnished or caused to be furnishedto you at such Time of Delivery certificates of officers of the Companysatisfactory to you as to the accuracy of the representations andwarranties of the Company herein at and as of such Time of Delivery, asto the performance by the Company of all of its obligations hereunderto be performed at or prior to such Time of Delivery, as to the matters

set forth in subsections (a) and (f) of this Section and as to suchother matters as you may reasonably request.

8. (a) The Company will indemnify and hold harmless each Underwriteragainst any losses, claims, damages or liabilities, joint or several, to whichsuch Underwriter may become subject, under the Act or otherwise, insofar as suchlosses, claims, damages or liabilities (or actions in respect thereof) arise outof or are based upon an untrue statement or alleged untrue statement of amaterial fact contained in any Preliminary Prospectus, the RegistrationStatement or the Prospectus, or any amendment or supplement thereto, or ariseout of or are based upon the omission or alleged omission to state therein amaterial fact required to be stated therein or necessary to make the statements

therein not misleading, and will reimburse each Underwriter for any legal orother expenses reasonably incurred by such Underwriter in connection withinvestigating or defending any such action or claim as such expenses areincurred; provided, however, that the Company shall not be liable in any suchcase to the extent that any such loss, claim, damage or liability arises out ofor is based upon an untrue statement or alleged untrue statement or omission oralleged omission made in any Preliminary Prospectus, the Registration Statementor the

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Prospectus or any such amendment or supplement in reliance upon and inconformity with written information furnished to the Company by or on behalfof any Underwriter through Goldman, Sachs & Co. expressly for use therein andprovided, further, that the Company shall not be liable to any Underwriter underthe indemnity agreement in this subsection (a) with respect to any PreliminaryProspectus to the extent that any such loss, claim, damage or liability of suchUnderwriter results from the fact such Underwriter sold Shares to a person towhom there was not sent or given, at or prior to the written confirmation ofsuch sale, a copy of the Prospectus as then amended or supplemented (excludingdocuments incorporated by reference) in any case where such delivery is requiredby the Act if the Company has previously furnished copies thereof to suchUnderwriter and the loss, claim, damage or liability of such Underwriter results


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from an untrue statement or omission of a material fact contained in thePreliminary Prospectus which was corrected in the Prospectus (or the Prospectusas amended or supplemented).

(b) Each Underwriter will indemnify and hold harmless the Companyagainst any losses, claims, damages or liabilities to which the Company maybecome subject, under the Act or otherwise, insofar as such losses, claims,damages or liabilities (or actions in respect thereof) arise out of or are basedupon an untrue statement or alleged untrue statement of a material factcontained in any Preliminary Prospectus, the Registration Statement or theProspectus, or any amendment or supplement thereto, or arise out of or are basedupon the omission or alleged omission to state therein a material fact requiredto be stated therein or necessary to make the statements therein not misleading,in each case to the extent, but only to the extent, that such untrue statementor alleged untrue statement or omission or alleged omission was made in any

Preliminary Prospectus, the Registration Statement or the Prospectus or any suchamendment or supplement in reliance upon and in conformity with writteninformation furnished to the Company by such Underwriter through Goldman,Sachs& Co. expressly for use therein; and will reimburse the Company for any legal orother expenses reasonably incurred by the Company in connection withinvestigating or defending any such action or claim as such expenses areincurred.

(c) Promptly after receipt by an indemnified party under subsection (a)or (b) above of notice of the commencement of any action, such indemnified partyshall, if a claim in respect thereof is to be made against an indemnifying party

under such subsection, notify the indemnifying party in writing of thecommencement thereof; but the omission so to notify the indemnifying party shallnot relieve it from any liability which it may have to any indemnified partyotherwise than under such subsection. In case any such action shall be broughtagainst any indemnified party and it shall notify the indemnifying party of thecommencement thereof, the indemnifying party shall be entitled to participatetherein and, to the extent that it shall wish, jointly with any otherindemnifying party similarly notified, to assume the defense thereof, withcounsel satisfactory to such indemnified party (who shall not, except with theconsent of the indemnified party, be counsel to the indemnifying party), and,after notice from the indemnifying party to such indemnified party of its

election so to assume the defense thereof, the indemnifying party shall not beliable to

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such indemnified party under such subsection for any legal expenses of othercounsel or any other expenses, in each case subsequently incurred by suchindemnified party, in connection with the defense thereof other than reasonablecosts of investigation. No indemnifying party shall, without the written consentof the indemnified party, effect the settlement or compromise of, or consent tothe entry of any judgment with respect to, any pending or threatened action orclaim in respect of which indemnification or contribution may be sought


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hereunder (whether or not the indemnified party is an actual or potential partyto such action or claim) unless such settlement, compromise or judgment (i)includes an unconditional release of the indemnified party from all liabilityarising out of such action or claim and (ii) does not include a statement as to,

or an admission of, fault, culpability or a failure to act, by or on behalf ofany indemnified party.

(d) If the indemnification provided for in this Section 8 isunavailable to or insufficient to hold harmless an indemnified party undersubsection (a) or (b) above in respect of any losses, claims, damages orliabilities (or actions in respect thereof) referred to therein, then eachindemnifying party shall contribute to the amount paid or payable by suchindemnified party as a result of such losses, claims, damages or liabilities (oractions in respect thereof) in such proportion as is appropriate to reflect therelative benefits received by the Company on the one hand and the Underwriters

on the other from the offering of the Shares. If, however, the allocationprovided by the immediately preceding sentence is not permitted by applicablelaw or if the indemnified party failed to give the notice required undersubsection (c) above, then each indemnifying party shall contribute to suchamount paid or payable by such indemnified party in such proportion as isappropriate to reflect not only such relative benefits but also the relativefault of the Company on the one hand and the Underwriters on the other inconnection with the statements or omissions which resulted in such losses,claims, damages or liabilities (or actions in respect thereof), as well as anyother relevant equitable considerations. The relative benefits received by theCompany on the one hand and the Underwriters on the other shall be deemed to bein the same proportion as the total net proceeds from the offering (before

deducting expenses) received by the Company bear to the total underwritingdiscounts and commissions received by the Underwriters, in each case as setforth in the table on the cover page of the Prospectus. The relative fault shallbe determined by reference to, among other things, whether the untrue or allegeduntrue statement of a material fact or the omission or alleged omission to statea material fact relates to information supplied by the Company on the one handor the Underwriters on the other and the parties' relative intent, knowledge,access to information and opportunity to correct or prevent such statement oromission. The Company and the Underwriters agree that it would not be just andequitable if contributions pursuant to this subsection (e) were determined bypro rata allocation (even if the Underwriters were treated as one entity for

such purpose) or by any other method of allocation which does not take accountof the equitable considerations referred to above in this subsection (e). Theamount paid or payable by an indemnified party as a result of the losses,claims, damages or liabilities (or actions in respect thereof) referred to abovein this subsection (e) shall be deemed to include any legal or other expensesreasonably

1920

incurred by such indemnified party in connection with investigating or defendingany such action or claim. Notwithstanding the provisions of this subsection (e),


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no Underwriter shall be required to contribute any amount in excess of theamount by which the total price at which the Shares underwritten by it anddistributed to the public were offered to the public exceeds the amount of anydamages which such Underwriter has otherwise been required to pay by reason of

such untrue or alleged untrue statement or omission or alleged omission. Noperson guilty of fraudulent misrepresentation (within the meaning of Section11(f) of the Act) shall be entitled to contribution from any person who was notguilty of such fraudulent misrepresentation. The Underwriters' obligations inthis subsection (d) to contribute are several in proportion to their respectiveunderwriting obligations and not joint.

(e) The obligations of the Company under this Section 8 shall be inaddition to any liability which the Company may otherwise have and shall extend,upon the same terms and conditions, to each person, if any, who controls anyUnderwriter within the meaning of the Act; and the obligations of the

Underwriters under this Section 8 shall be in addition to any liability whichthe respective Underwriters may otherwise have and shall extend, upon the sameterms and conditions, to each officer and director of the Company and to eachperson, if any, who controls the Company within the meaning of the Act.

9. (a) If any Underwriter shall default in its obligation to purchasethe Shares which it has agreed to purchase hereunder at a Time of Delivery, youmay in your discretion arrange for you or another party or other parties topurchase such Shares on the terms contained herein. If within 36 hours aftersuch default by any Underwriter you do not arrange for the purchase of suchShares, then the Company shall be entitled to a further period of 36 hourswithin which to procure another party or other parties satisfactory to you to

purchase such Shares on such terms. In the event that, within the respectiveprescribed periods, you notify the Company that you have so arranged for thepurchase of such Shares, or the Company notifies you that it has so arranged forthe purchase of such Shares, you or the Company shall have the right to postponesuch Time of Delivery for a period of not more than seven days, in order toeffect whatever changes may thereby be made necessary in the RegistrationStatement or the Prospectus, or in any other documents or arrangements, and theCompany agrees to file promptly any amendments to the Registration Statement orthe Prospectus which in your opinion may thereby be made necessary. The term"Underwriter" as used in this Agreement shall include any person substitutedunder this Section with like effect as if such person had originally been a

party to this Agreement with respect to such Shares.

(b) If, after giving effect to any arrangements for the purchase of theShares of a defaulting Underwriter or Underwriters by you and the Company asprovided in subsection (a) above, the aggregate number of such Shares whichremains unpurchased does not exceed one-eleventh of the aggregate number of allthe Shares to be purchased at such Time of Delivery, then the Company shall havethe right to require each non-defaulting Underwriter to purchase the number ofShares which such

20


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21Underwriter agreed to purchase hereunder at such Time of Delivery and, inaddition, to require each non-defaulting Underwriter to purchase its pro ratashare (based on the number of Shares which such Underwriter agreed to purchase

hereunder) of the Shares of such defaulting Underwriter or Underwriters forwhich such arrangements have not been made; but nothing herein shall relieve adefaulting Underwriter from liability for its default.

(c) If, after giving effect to any arrangements for the purchase of theShares of a defaulting Underwriter or Underwriters by you and the Company asprovided in subsection (a) above, the aggregate number of such Shares whichremains unpurchased exceeds one-eleventh of the aggregate number of all theShares to be purchased at such Time of Delivery, or if the Company shall notexercise the right described in subsection (b) above to require non-defaultingUnderwriters to purchase Shares of a defaulting Underwriter or Underwriters,

then this Agreement (or, with respect to the Second Time of Delivery, theobligations of the Underwriters to purchase and of the Company to sell theOptional Shares) shall thereupon terminate, without liability on the part of anynon-defaulting Underwriter or the Company except for the expenses to be borne bythe Company and the Underwriters as provided in Section 6 hereof and theindemnity and contribution agreements in Section 8 hereof; but nothing hereinshall relieve a defaulting Underwriter from liability for its default.

10. The respective indemnities, agreements, representations, warrantiesand other statements of the Company and the several Underwriters, as set forthin this Agreement or made by or on behalf of them, respectively, pursuant tothis Agreement, shall remain in full force and effect, regardless of any

investigation (or any statement as to the results thereof) made by or on behalfof any Underwriter or any controlling person of any Underwriter, or the Company,or any officer or director or controlling person of the Company, and shallsurvive delivery of and payment for the Shares.

11. If this Agreement shall be terminated pursuant to Section 9 hereof,or if any Shares are not delivered by the Company as provided herein because thecondition set forth in Section 7(f) hereof has not been met, the Company shallnot then be under any liability to any Underwriter except as provided inSections 6 and 8 hereof; but, if for any other reason any Shares are notdelivered by or on behalf of the Company as provided herein, because the Company

failed to satisfy any of the conditions set forth in Section 7 hereof, otherthan the condition set forth in 7(f), or because of any refusal or failure ofthe Company to perform any agreement herein or to comply with any provisionshereof, other than by reason of a default by an Underwriter, the Company willreimburse the Underwriters through you for all out-of-pocket expenses approvedin writing by you, including fees and disbursements of counsel, reasonablyincurred by the Underwriters in making preparations for the purchase, sale anddelivery of the Shares not so delivered, but the Company shall then be under nofurther liability to any Underwriter except as provided in Sections 6 and 8hereof.


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2122

12. In all dealings hereunder, you shall act on behalf of each of the

Underwriters, and the parties hereto shall be entitled to act and rely upon anystatement, request, notice or agreement on behalf of any Underwriter made orgiven by you jointly or by Goldman, Sachs & Co. on behalf of you as therepresentatives.

All statements, requests, notices and agreements hereunder shall be inwriting, and if to the Underwriters shall be delivered or sent by mail, telex orfacsimile transmission to you as the representatives in care of Goldman, Sachs &Co., 85 Broad Street, New York, New York 10004, Attention: RegistrationDepartment; and if to the Company shall be delivered or sent by mail to theaddress of the Company set forth in the Registration Statement, Attention:

Secretary; provided, however, that any notice to an Underwriter pursuant toSection 8(c) hereof shall be delivered or sent by mail, telex or facsimiletransmission to such Underwriter at its address set forth in its Underwriters'Questionnaire, or telex constituting such Questionnaire, which address has beensupplied to the Company. Any such statements, requests, notices or agreementsshall take effect upon receipt thereof.

13. This Agreement shall be binding upon, and inure solely to thebenefit of, the Underwriters, the Company and, to the extent provided inSections 8 and 10 hereof, the officers and directors of the Company and eachperson who controls the Company or any Underwriter, and their respective heirs,executors, administrators, successors and assigns, and no other person shall

acquire or have any right under or by virtue of this Agreement. No purchaser ofany of the Shares from any Underwriter shall be deemed a successor or assign byreason merely of such purchase.

14. Time shall be of the essence of this Agreement. As used herein,the term "business day" shall mean any day when the Commission's office inWashington, D.C. is open for business.

15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUEDIN ACCORDANCEWITH THE LAWS OF THE STATE OF NEW YORK.

16. This Agreement may be executed by any one or more of the partieshereto in any number of counterparts, each of which shall be deemed to be anoriginal, but all such counterparts shall together constitute one and the sameinstrument.

2223

If the foregoing is in accordance with your understanding, please signand return to us five counterparts hereof, and upon the acceptance hereof byyou, on behalf of each of the Underwriters, this letter and such acceptance


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hereof shall constitute a binding agreement between each of the Underwriters andthe Company. It is understood that your acceptance of this letter on behalf ofeach of the Underwriters is pursuant to the authority set forth in a form ofAgreement among Underwriters, the form of which shall be submitted to the

Company for examination upon request, but without warranty on your part as tothe authority of the signers thereof.

Very truly yours,


By: ___________________________

Name:Title:

Accepted as of the date hereofat New York, New York:

Goldman, Sachs & Co.Morgan Stanley & Co. Incorporated

By: ______________________________

(Goldman, Sachs & Co.)

On behalf of each of the Underwriters

2324

SCHEDULE I

NUMBER OF

OPTIONAL

SHARES TOBE


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OTAL NUMBER OFPURCHASED IF

FIRM SHARES

MAXIMUM OPTIONUNDERWRITER

TO BEPURCHASED

EXERCISED-----------

--------------- --------------------

Goldman, Sachs &

Co...............................Morgan Stanley & Co.Incorporated.................

TOTAL....................................

===================================

2425

ANNEX I

Pursuant to Section 7(e) of the Underwriting Agreement, the accountantsshall furnish letters to the Underwriters to the effect that:

(i) They are independent certified public accountants withrespect to the Company and its subsidiaries within the meaning of theAct and the applicable published rules and regulations thereunder

(ii) In their opinion, the financial statements and anysupplementary financial information and schedules (and, if applicable,financial forecasts and/or pro forma financial information) examined bythem and included or incorporated by reference in the RegistrationStatement or the Prospectus comply as to form in all material respectswith the applicable accounting requirements of the Act or the Exch

Documents

SEC Filings - Microsoft - 0000891020-96-001563