<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 24, 1999
REGISTRATION NO. 333-79479
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NETWORK PLUS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4813 04-3430576
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
234 COPELAND STREET
QUINCY, MASSACHUSETTS 02169
(617) 786-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES J. CROWLEY, ESQ.
EXECUTIVE VICE PRESIDENT AND
CHIEF OPERATING OFFICER
234 COPELAND STREET,
QUINCY, MASSACHUSETTS 02169
(617) 786-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
<TABLE>
<S> <C>
JEFFREY N. CARP, ESQ. JOHN T. GAFFNEY, ESQ.
WILLIAM S. GEHRKE, ESQ. CRAVATH, SWAINE & MOORE
HALE AND DORR LLP 825 EIGHTH AVENUE
60 STATE STREET NEW YORK, NEW YORK 10019
BOSTON, MASSACHUSETTS 02109 (212) 474-1000
(617) 526-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date hereof.
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,
check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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,
check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 2 to Form S-1 (File No. 333-79479) of Network Plus Corp.
is filed solely to file the exhibits listed in Item 16 and the Exhibit Index.
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
1 -- Form of Underwriting Agreement.
3.1* -- Certificate of Incorporation.
3.2* -- Certificate of Designation of the Series A preferred stock.
3.3* -- By-laws.
3.4*** -- Form of Certificate of Amendment to Certificate of
Incorporation, as will be in effect following the
effectiveness of this Registration Statement.
3.5*** -- Form of Amended and Restated Certificate of Incorporation,
as will be in effect following the closing of the offering.
3.6*** -- Form of Amended and Restated By-laws, as will be in effect
upon the closing of the offering.
4.1* -- Exchange and Registration Rights Agreement dated as of
September 1, 1998 between Network Plus and Goldman, Sachs &
Co., Lehman Brothers Inc., and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.
4.2* -- Purchase Agreement dated as of September 1, 1998 between
Network Plus and Goldman, Sachs & Co., Lehman Brothers Inc.,
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4.3*** -- Form of Common Stock Certificate.
5*** -- Opinion of Hale and Dorr LLP.
10.1*** -- 1998 Stock Incentive Plan, as amended.
10.2*** -- 1998 Director Stock Option Plan, as amended.
10.3+* -- Resale Solutions Switched Services Agreement dated as of
June 21, 1998 between Network Plus, Inc. and Sprint
Communications Company L.P.
10.4+* -- Agreement for the Provision of Fiber Optic Facilities and
Services dated as of July 17, 1998 between Network Plus,
Inc. and Northeast Optic Network, Inc.
10.5+* -- IRU Agreement dated as of July 17, 1998 between Network
Plus, Inc. and Qwest Communications Corporation.
10.6* -- Net Lease by and between Network Plus Realty Trust,
Landlord, and Network Plus, Inc., Tenant, dated July 1,
1993.
10.7* -- Interconnection Agreement Under Sections 251 and 252 of the
Telecommunications Act of 1996, dated September 4, 1998, by
and between New England Telephone and Telegraph Company
d/b/a Bell Atlantic -- Massachusetts and Network Plus Inc.
10.8* -- Loan and Security Agreement dated October 7, 1998 by and
between Network Plus, Inc. as Borrower, Goldman Sachs Credit
Partners L.P. and Fleet National Bank as Lenders, Fleet
National Bank as Agent and Goldman Sachs Credit Partners
L.P. as Syndication and Arrangement Agent.
10.8A -- Amendment to Loan and Security Agreement dated October 7,
1998 by and between Network Plus, Inc. as Borrower, Goldman
Sachs Credit Partners L.P. and Fleet National Bank as
Lenders, Fleet National Bank as Agent and Goldman Sachs
Credit Partners L.P. as Syndication and Arrangement Agent.
10.9+* -- Master Lease Agreement, dated as of August 8, 1997, between
Chase Equipment Leasing, Inc. and Network Plus, Inc., as
amended.
10.10*** -- Form of Stock Option Agreement under 1998 Director Stock
Option Plan.
10.11*** -- Form of Incentive Stock Option Agreement under 1998 Stock
Incentive Plan.
10.12** -- Master Agreement, dated December 30, 1998, by and between
Comdisco, Inc. and Network Plus, Inc., along with Product
Supplement dated December 30, 1998, Addendum dated December
30, 1998, and Guarantee of Network Plus Corp. dated December
30, 1998.
10.13#*** -- xDSL Joint Market Development Agreement dated as of March
23, 1999 by and between NorthPoint Communications, Inc. and
Network Plus, Inc.
</TABLE>
II-3
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
10.14*** -- Letter Agreement dated April 20, 1999 by and between Network
Plus, Inc. and Joseph J. Larizza.
10.15*** -- Letter Agreement, dated July 16, 1998, by and between
Network Plus, Inc. and Joseph Haines.
10.16*** -- Form of Incentive Stock Option Agreement with James J.
Crowley under 1998 Stock Incentive Plan.
12* -- Ratio of Earnings to Fixed Charges.
21* -- Subsidiaries of the Registrant.
23.1*** -- Consent of PricewaterhouseCoopers LLP.
23.2*** -- Consent of Hale and Dorr LLP (included in their opinion
filed as Exhibit 5).
24*** -- Power of Attorney.
27*** -- Financial Data Schedule.
</TABLE>
- ---------------
* Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-64633).
** Incorporated by reference to the Company's Annual Report on Form 10-K filed
on March 30, 1999.
*** Previously filed.
+ Confidential treatment granted as to certain portions.
# Confidential treatment requested as to certain portions.
(b) Financial Statement Schedules:
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS -- PREVIOUSLY FILED
All other schedules have been omitted because they are not applicable or
not required or the required information is included in the financial statements
or notes thereto.
II-4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to Registration Statement on Form S-1 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Quincy,
State of Massachusetts, on June 24, 1999.
NETWORK PLUS CORP.
By: /s/ JAMES J. CROWLEY
------------------------------------
James J. Crowley
Executive Vice President, Chief
Operating Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to Registration Statement on Form S-1 has been signed below by
the following persons, in the capacities indicated, as of June 24, 1999.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
* Chairman of the Board
- --------------------------------------------------------
Robert T. Hale
* President, Chief Executive Officer and
- -------------------------------------------------------- Director (Principal Executive Officer)
Robert T. Hale, Jr.
/s/ JAMES J. CROWLEY Executive Vice President, Chief Operating
- -------------------------------------------------------- Officer, Secretary and Director
James J. Crowley
/s/ GEORGE ALEX Executive Vice President of Finance, Chief
- -------------------------------------------------------- Financial Officer and Treasurer (Principal
George Alex Financial and Accounting Officer)
* Director
- --------------------------------------------------------
David Martin
* Director
- --------------------------------------------------------
Joseph C. McNay
*By: /s/ JAMES J. CROWLEY
- --------------------------------------------------------
James J. Crowley,
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
1 -- Form of Underwriting Agreement.
3.1* -- Certificate of Incorporation.
3.2* -- Certificate of Designation of the Series A preferred stock.
3.3* -- By-laws.
3.4*** -- Form of Certificate of Amendment to Certificate of
Incorporation, as will be in effect following the
effectiveness of this Registration Statement.
3.5*** -- Form of Amended and Restated Certificate of Incorporation,
as will be in effect following the closing of the offering.
3.6*** -- Form of Amended and Restated By-laws, as will be in effect
upon the closing of the offering.
4.1* -- Exchange and Registration Rights Agreement dated as of
September 1, 1998 between Network Plus and Goldman, Sachs &
Co., Lehman Brothers Inc., and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.
4.2* -- Purchase Agreement dated as of September 1, 1998 between
Network Plus and Goldman, Sachs & Co., Lehman Brothers Inc.,
and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
4.3*** -- Form of Common Stock Certificate.
5*** -- Opinion of Hale and Dorr LLP.
10.1*** -- 1998 Stock Incentive Plan, as amended.
10.2*** -- 1998 Director Stock Option Plan, as amended.
10.3+* -- Resale Solutions Switched Services Agreement dated as of
June 21, 1998 between Network Plus, Inc. and Sprint
Communications Company L.P.
10.4+* -- Agreement for the Provision of Fiber Optic Facilities and
Services dated as of July 17, 1998 between Network Plus,
Inc. and Northeast Optic Network, Inc.
10.5+* -- IRU Agreement dated as of July 17, 1998 between Network
Plus, Inc. and Qwest Communications Corporation.
10.6* -- Net Lease by and between Network Plus Realty Trust,
Landlord, and Network Plus, Inc., Tenant, dated July 1,
1993.
10.7* -- Interconnection Agreement Under Sections 251 and 252 of the
Telecommunications Act of 1996, dated September 4, 1998, by
and between New England Telephone and Telegraph Company
d/b/a Bell Atlantic -- Massachusetts and Network Plus Inc.
10.8* -- Loan and Security Agreement dated October 7, 1998 by and
between Network Plus, Inc. as Borrower, Goldman Sachs Credit
Partners L.P. and Fleet National Bank as Lenders, Fleet
National Bank as Agent and Goldman Sachs Credit Partners
L.P. as Syndication and Arrangement Agent.
10.8A -- Amendment to Loan and Security Agreement dated October 7,
1998 by and between Network Plus, Inc. as Borrower, Goldman
Sachs Credit Partners L.P. and Fleet National Bank as
Lenders, Fleet National Bank as Agent and Goldman Sachs
Credit Partners L.P. as Syndication and Arrangement Agent.
10.9+* -- Master Lease Agreement, dated as of August 8, 1997, between
Chase Equipment Leasing, Inc. and Network Plus, Inc., as
amended.
10.10*** -- Form of Stock Option Agreement under 1998 Director Stock
Option Plan.
10.11*** -- Form of Incentive Stock Option Agreement under 1998 Stock
Incentive Plan.
10.12** -- Master Agreement, dated December 30, 1998, by and between
Comdisco, Inc. and Network Plus, Inc., along with Product
Supplement dated December 30, 1998, Addendum dated December
30, 1998, and Guarantee of Network Plus Corp. dated December
30, 1998.
10.13#*** -- xDSL Joint Market Development Agreement dated as of March
23, 1999 by and between NorthPoint Communications, Inc. and
Network Plus, Inc.
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
10.14*** -- Letter Agreement dated April 20, 1999 by and between Network
Plus, Inc. and Joseph J. Larizza.
10.15*** -- Letter Agreement, dated July 16, 1998, by and between
Network Plus, Inc. and Joseph Haines.
10.16*** -- Form of Incentive Stock Option Agreement with James J.
Crowley under 1998 Stock Incentive Plan.
12* -- Ratio of Earnings to Fixed Charges.
21* -- Subsidiaries of the Registrant.
23.1*** -- Consent of PricewaterhouseCoopers LLP.
23.2*** -- Consent of Hale and Dorr LLP (included in their opinion
filed as Exhibit 5).
24*** -- Power of Attorney.
27*** -- Financial Data Schedule.
</TABLE>
- ---------------
* Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-64633).
** Incorporated by reference to the Company's Annual Report on Form 10-K filed
on March 30, 1999.
*** Previously filed.
+ Confidential treatment granted as to certain portions.
# Confidential treatment requested as to certain portions.
<PAGE> 1
EXHIBIT 1
FORM OF UNDERWRITING AGREEMENT
NETWORK PLUS CORP.
COMMON STOCK
Underwriting Agreement
----------------------
, 1999
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Wit Capital Corporation
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Network Plus Corp., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
8,000,000 shares and, at the election of the Underwriters, up to 1,200,000
additional shares, of Common Stock ("Stock") of the Company. The aggregate of
8,000,000 shares to be sold by the Company is herein called the "Firm Shares"
and the aggregate of 1,200,000 additional shares to be sold by the Company is
herein called the "Optional Shares". The Firm Shares and the Optional Shares
that the Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Shares".
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (FILE NO. 333-79479) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than 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 Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission;
and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Registration Statement at the time it was
declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any,
<PAGE> 2
2
became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus, in the
form first filed pursuant to Rule 424(b) under the Act, is hereinafter
called the "Prospectus";
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements
of the Act and the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Goldman, Sachs & Co. expressly for use therein;
(d) Neither the Company nor Network Plus, Inc., a Massachusetts
corporation (the "Subsidiary"), which is the only direct or indirect
subsidiary of the Company, has sustained since the date of the latest
audited financial statements included in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, other than option grants in the ordinary
course of business pursuant to option plans as in effect prior to the
date hereof, there has not been any change in the capital stock or
long-term debt of the Company or the Subsidiary or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its Subsidiary, otherwise than as set forth or
contemplated in the Prospectus;
(e) The Company and its Subsidiary do not own any real property and
have good and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company
and its Subsidiary; and any real property and buildings held under
lease by the Company and its Subsidiary are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiary;
<PAGE> 3
3
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, with power
and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and the Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Massachusetts, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(g) Each of the Company and its Subsidiary has an authorized
capitalization as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company and its Subsidiary have been
duly and validly authorized and issued, are fully paid and
nonassessable and conform to the description of the Stock contained in
the Prospectus; all of the issued capital stock of the Subsidiary is
owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims; there are no restrictions on
subsequent transfers of the Shares under the laws of the United States
except as set forth in the Prospectus, as amended or supplemented;
(h) The Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued and fully paid and non-assessable and will
conform to the description of the Stock contained in the Prospectus;
(i) the issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not:
(i) result in any violation of the provisions of the
constituent documents, by-laws or resolutions of the
directors or shareholders of the Company or its
Subsidiary;
(ii) conflict with nor will they result in a breach of or
violation of any of the terms or provisions of, or
constitute a default under (or an event which with
notice or lapse of time, or both, would constitute a
default), or require consent under, or result in the
creation or imposition of any lien, charge or
encumbrance on any of the property or assets of the
Company or its Subsidiary pursuant to the terms of, any
shareholders' agreement, employment agreements,
indenture, mortgage, deed of trust, loan agreement,
note, lease, permit, franchise or other agreement or
instrument to which the Company or its Subsidiary is a
party or by which the Company or its Subsidiary is
bound or to which the property or assets of the Company
or its Subsidiary is subject; or
(iii) result in any violation of any law, rule or regulation
or any judgment, order or decree of any government,
governmental instrumentality or
<PAGE> 4
4
agency, regulatory body, court or body having
jurisdiction over the Company or its Subsidiary or any
of their properties and assets,
other than, in the case of clauses (ii) and (iii) above, for any
breach, default or violation which would not have a material adverse
effect on the condition (financial or other), business, Prospects,
affairs, management, financial position, shareholders' equity or
results of operation of the Company and its Subsidiary, taken as a
whole;
(j) Prior to the date hereof, neither the Company nor its Subsidiary
has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection
with the offering of the Stock.
(k) Except as set forth in or contemplated by the Registration
Statement, (i) each of the Company and its Subsidiary has all material
certificates, consents, exemptions, orders, permits, licenses,
authorizations, franchises or other material approvals (each, an
"Authorization") of and from, and has made all material declarations
and filings with, all Federal, state, local and other governmental
authorities, all self-regulatory organizations, and all courts and
other tribunals, necessary or appropriate for the Company and its
Subsidiary to own, lease, license, use and construct its properties
and assets and to conduct its business in the manner described in the
Registration Statement; (ii) all such Authorizations are in full force
and effect with respect to the Company and its Subsidiary; (iii) to
the best knowledge of the Company, no event has occurred that permits,
or after notice or lapse of time could permit, the revocation,
termination or modification of any such Authorization; (iv) the
Company and its Subsidiary are in compliance in all material respects
with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto; and (v) the Company
has no knowledge that any person is contesting or intends to contest
the granting of any material Authorization, except, in the case of
Clauses (i) through (v) above, for any Authorization the absence,
violation, or loss of which would not have a material adverse effect
on the condition (financial or other), business, Prospects, affairs,
management, financial position, stockholders' equity or results of
operation of the Company and its Subsidiary, taken as a whole;
(l) Neither the execution or delivery of this Agreement, nor the
consummation of the transactions contemplated hereby or thereby nor
compliance with the terms, conditions and provisions hereof or thereof
by the Company will cause any suspension, revocation, impairment,
forfeiture, nonrenewal or termination of any Authorization;
(m) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as it purports to constitute a
summary of the terms of the Common Stock, and under the captions "Risk
Factors -- Competition in our industry is intense and growing" and
"The Telecommunications Act of 1996 and other regulation could
adversely affect us", "Competition", "Government Regulation", "Certain
Transactions", "Description of Certain Indebtedness", and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate and complete;
(n) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or its
Subsidiary is a party or of which any property of the Company or its
Subsidiary is the subject which, if determined adversely to the
Company or its Subsidiary, would individually or in the aggregate have
a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of
the Company and its Subsidiary; and,
<PAGE> 5
5
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(o) This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against it in accordance with
its terms except (i) that the enforcement thereof may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and the discretion of the court before
which any proceeding therefor may be brought and (ii) as any rights to
indemnity or contribution thereunder may be limited by applicable
Securities laws;
(p) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(q) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(r) PriceWaterhouseCoopers, LLP who have certified certain financial
statements of the Company and its Subsidiary, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(s) The Company has reviewed its operations and that of its
Subsidiary and any third parties with which the Company or its
Subsidiary has a material relationship to evaluate the extent to which
the business or operations of the Company or its Subsidiary will be
affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year
2000 Problem will have a material adverse effect on the general
affairs, management, the current or future consolidated financial
position, business prospects, stockholders' equity or results of
operations of the Company and its Subsidiary or result in any material
loss or interference with the Company's business or operations. The
"Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000;
(t) The Company and its Subsidiary are not, as of the date hereof,
and will not be at any Time of Delivery, as defined herein by section
4(a), in violation of their constituent documents, by-laws or
resolutions of their directors or shareholders;
(u) The Company and its Subsidiary are not and will not be at any
Time of Delivery, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, shareholders' agreement, indenture, mortgage, deed of trust,
loan agreement, note, lease, permit, license, franchise or other
agreement or instrument to which they are a party or by which they are
bound or to which any of their property or assets is subject other
than such defaults as would not have a material adverse effect on the
condition (financial or other), business, prospects described in the
Prospectus (collectively, "Prospects"), affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its Subsidiary, taken as a whole;
<PAGE> 6
6
(v) No holder of any security of the Company has or will have any
right to require the registration of such security by virtue of any
transactions contemplated by this Agreement, other than any such right
that has been expressly waived in writing;
(w) The audited balance sheet of the Company as at December 31, 1998
(including the notes thereto) included in the Offering Circular
presents fairly in all material respects the consolidated financial
position of the Company as at the date indicated and has been prepared
in accordance with generally accepted accounting principles ("GAAP");
the unaudited interim financial statements of the Company (including
the notes thereto) included in the Offering Circular present fairly in
all material respects the financial position of the Company as at the
dates indicated and the results of operations and the changes in its
financial position for the periods specified, subject to year-end
adjustments and have been prepared in accordance with GAAP, except for
the absence of footnotes and year-end adjustments.
2. Subject to the terms and conditions herein set forth, (a)the
Company agrees to issue and sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at a purchase price per share of $15, the number of
Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto; and
(b) In the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Shares as provided below,
the Company agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price per share set forth in clause (a)
of this Section 2, that portion of the number of Optional Shares as to
which such election shall have been exercised (to be adjusted by you
so as to eliminate fractional shares) determined by multiplying such
number of Optional Shares by a fraction the numerator of which is the
maximum number of Optional Shares which such Underwriter is entitled
to purchase as set forth opposite the name of such Underwriter in
Schedule 1 hereto and the denominator of which is the maximum number
of Optional Shares that all of the Underwriters are entitled to
purchase hereunder. The Company hereby grants to the Underwriters the
right to purchase at their election up to 1,200,000 Optional Shares,
at the purchase price per share set forth in the paragraph above, for
the sole purpose of covering over-allotments in the sale of the Firm
Shares. Any such election to purchase Optional 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 and 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 but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company otherwise
agree in writing, earlier than two 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, the
several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered
in such names as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by
or on behalf of the Company to Goldman, Sachs & Co., for the account
of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Goldman,
Sachs & Co. at least
<PAGE> 7
7
forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking 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 time and date of such delivery and payment shall be,
with respect to the Firm Shares, 9:30 a.m., New York City time, on
July , 1999 or such other time and date as Goldman, Sachs & Co. and
the Company may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York City time, on the date specified
by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs
& Co. of the Underwriters' election to purchase such Optional Shares,
or such other time and date as Goldman, Sachs & Co. and the Company
may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery", such time and
date for delivery of the 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 herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including
the cross receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(j) hereof will be
delivered at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, NY, 10019 (the "Closing Location"), and the Shares
will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents
to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive
order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, 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 you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you with copies thereof; to advise you, promptly after
it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the Securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
<PAGE> 8
8
necessary to complete the distribution of the Shares; provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
Subsidiary (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 and continuing
to and including the date 180 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except
as provided hereunder, any Securities of the Company that are
substantially similar to the Shares, including but not limited to any
Securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially
similar Securities (other than pursuant to employee stock option plans
existing on, or upon the conversion or exchange of convertible or
exchangeable Shares outstanding as of, the date of this Agreement),
without your prior written consent;
(f) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act;
(g) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the
Company and its subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration
Statement), to make available to its stockholders consolidated summary
financial information of the Company and its Subsidiary for such
quarter in reasonable detail;
<PAGE> 9
9
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national Securities exchange on which any class of
Securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its Subsidiary are consolidated in reports
furnished to its stockholders generally or to the Commission);
(i) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(j) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations
National Market System ("NASDAQ");
(k) To file with the Commission such information on Form 10-Q of Form
10-K as may be required by Rule 463 under the Act; and
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission 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 the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters
that (a) the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants
in connection with the registration of the Shares under the Act and all
other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters and dealers; (ii) the cost of printing
or producing any Agreement among Underwriters, this Agreement, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state Securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and (iv) all fees and
expenses in connection with listing the Shares on NASDAQ and the filing
fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale
of the Shares; (v) the cost of preparing stock certificates; (vi) the cost
and charges of any transfer agent or registrar; and (vii) all other costs
and expenses incident to the performance of its obligations hereunder which
are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections
8 and 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 of the Shares by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder as to the Shares to
be delivered at each Time of Delivery shall be subject, in their
discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at
<PAGE> 10
10
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 Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Cravath, Swaine & Moore, counsel for the Underwriters, shall
have furnished to you such written opinion or opinions dated such Time
of Delivery as to such related matters as you may reasonably request,
and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(c) Hale and Dorr LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery,
in form and substance satisfactory to you, substantially in the form
set forth in Schedule 7(b);
(d) Swidler Berlin Shereff Friedman, LLP, counsel for the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, substantially in
the form set forth in Schedule 7(c).
(e) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement
filed subsequent to the date of this Agreement and also at each Time
of Delivery, PriceWaterhouseCoopers shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth in
Annex I hereto (the executed copy of the letter delivered prior to the
execution of the Agreement is attached as Annex 1(a) hereto and a
draft of the form of letter to be delivered on the effective date of
any post-effective amendment to the Registration Statement and as of
each Time of Delivery is attached as Annex 1(b) hereto;
(f)(i) Neither the Company nor its Subsidiary shall have sustained
since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or its
Subsidiary or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its Subsidiary, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
<PAGE> 11
11
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt Shares or preferred
stock by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on NASDAQ; (ii)
a suspension or material limitation in trading in the Company's
securities on NASDAQ; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities;
or (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this Clause (iv)
in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in
the manner contemplated in the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly listed
for quotation on NASDAQ;
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery,
as to the performance by the Company of all of its obligations
hereunder to 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 such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through Goldman, Sachs & Co. expressly
for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
<PAGE> 12
12
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to 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 statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Goldman, Sachs &
Co. expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability hereunder to the extent it is not materially prejudiced
as a result thereof (but shall relieve it from liability under Section
8(a) or 8(b), as the case may be, to the extent the indemnifying party
is materially prejudiced) and in any event shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent 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 be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified
party is an actual or potential party to such action or claim) unless
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising 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
of any indemnified party. No indemnifying party shall be required to
indemnify an indemnified party for any amount paid or payable by such
indemnified party in the settlement of any action, proceeding or
investigation without the written consent of such indemnifying party,
which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law
or if the
<PAGE> 13
13
indemnified party failed to give the notice required under subsection
(c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro 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 account of
the equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition 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 any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions,
to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party
or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then
the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within
the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company
notifies you that it has so arranged for the purchase of such Shares,
you or the Company shall have the right to postpone a Time of Delivery
for a period of not more than
<PAGE> 14
14
seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file
promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under 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
the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of
Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and,
in addition, to require each non-defaulting Underwriter to purchase
its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such
defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of
Delivery, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell
the Optional Shares) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, and the several
Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and
payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason any Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you
for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares, but
the Company shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6 and
8 hereof.
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
any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as
the representatives.
<PAGE> 15
15
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of
Goldman, Sachs & Co., 32 Old Slip, 21st Floor, New York, New York 10005,
Attention: Registration Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company or by you on request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and
each person 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 of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason 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 in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus
one for each counsel counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters
and the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth
in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty
on your part as to the authority of the signers thereof.
Very truly yours,
NETWORK PLUS CORP.
By:...........................
Name:
Title:
Accepted as of the date hereof,
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Wit Capital Corporation
<PAGE> 16
16
By:.........................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 17
17
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
TOTAL NUMBER SHARES TO BE
OF FIRM SHARES PURCHASED IF
TO BE MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
<S> <C> <C>
Goldman, Sachs & Co.........................................
Bear, Stearns & Co. Inc.....................................
Donaldson, Lufkin & Jenrette Shares Corporation.............
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........
WIT Capital Corporation.....................................
--------- ---------
Total.......................................................
========= =========
</TABLE>
<PAGE> 18
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements, any
supplementary financial information and schedules, and pro forma financial
information examined by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute
of Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been separately furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such five fiscal years
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the
<PAGE> 19
2
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated
net
<PAGE> 20
3
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in paragraphs
(iii) and (vi) above, they have carried out certain specified procedures,
not constituting an examination in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives, which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives,
and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
<PAGE> 21
Schedule 7(b)
-------------
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with all corporate
power and authority to own its properties and conduct is business as described
in the Registration Statement. The Subsidiary, which is the only direct or
indirect subsidiary of the Company, has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Massachusetts.
2. The Company has an authorized capitalization as set forth in
Registration Statement, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable and all of the issued shares of capital stock of the Subsidiary
have been duly and validly authorized and issued and are fully paid and
non-assessable and the shares conform to the description of the stock contained
in the Prospectus; all of the outstanding shares of capital stock of the
Subsidiary are owned of record directly by the Company, and to such counsel's
knowledge, free and clear of all liens, encumbrances, equities or claims, except
as otherwise set forth in the Registration Statement.
3. The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of Commonwealth
of Massachusetts; the Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of those
jurisdictions indicated on Exhibit [ ].
4. To such counsel's knowledge, the Company and the Subsidiary do not own
any real property.
5. Any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries.
6. To such counsel's knowledge and other than as set forth in the
Registration Statement, there are no legal or governmental proceedings pending
or threatened to which the Company or its Subsidiary is a party or of which any
property of the Company or its Subsidiary is the subject.
7. This Agreement has been duly authorized, executed and delivered by the
Company.
8. The Shares to be issued and sold hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-assessable, and will
conform to the description of the Common Stock in the Prospectus. Neither the
Company nor the Subsidiary is in violation of its Certificate of Incorporation
or By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, or lease or agreement or other
instrument to which it is a party or by which it or any of its properties may be
bound.
9. The issue and sale of the Common Stock and the compliance by the
Company with all of the provisions of this Agreement, and the consummation of
the transactions contemplated herein, will not:
<PAGE> 22
2
(a) result in any violation of the provisions of the Certificate of
Incorporation (or Articles of Organization, as the case may be),
by-laws or resolutions of the directors or shareholders, which are
known to such counsel, of the Company or its Subsidiary; or
(b) result in any breach of any material agreement or instrument
identified in the Treasurer's Certificate as material to the Company
and the Subsidiary, taken as a whole; or
(c) result in any violation of any law, rule or regulation or any
judgment, order or decree, naming the Company or its Subsidiary and
known to such counsel, of any government, governmental instrumentality
or agency, regulatory body, court or body having jurisdiction over the
Company or its Subsidiary or any of their properties and assets; or
(d) conflict with or result in a breach or violation of any other terms or
provisions of, or constitute a default under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject.
10. No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters.
11. The statements set forth in the Prospectus (i) under the caption
"Description of the Capital Stock", insofar as it purports to constitute a
summary of the terms of the Common Stock, and (ii) under the captions "Certain
Transactions", "Description of Capital Stock","Description of Certain
Indebtedness", "Shares Eligible for Future Sales", and "Underwriting", insofar
as they purport to describe the provisions of the laws or the documents referred
to therein, are accurate in all material respects.
12. The Company is not an "investment company", as such term is defined in
the Investment Company Act.
The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder;
although such counsel do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in the opinion in
subsection 11 of this Schedule 7(c), such counsel have no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
<PAGE> 23
3
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of such Time of Delivery,
either the Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
such counsel do not know of any amendment to the Registration Statement required
to be filed or of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or described as
required.
<PAGE> 24
4
Schedule 7(c)
-------------
(i)(A) The execution, delivery, and performance of this Agreement by
the Company and the issue and sale of the Shares, do not violate (1) the
Communications Act applicable to the Company and/or its Subsidiary, (2) any
State Telecommunications laws applicable to the Company and/or its Subsidiary,
and (3) to the best of such counsel's knowledge, any decree from any court, and
(B) except as set forth in Schedule A, no authorization of or filing with the
FCC or any State Regulatory Agency that has not been received or made is
necessary for the execution and delivery of this Agreement by the Company and
the issue and sale of Shares contemplated hereby in accordance with the terms
hereof;
(ii) Network Plus is authorized by the FCC to provide domestic
interstate interexchange telecommunications services as a nondominant carrier
pursuant to 47 C.F.R. ss. 63.07(a) (1997) without any further order, license,
permit or other authorization by the FCC. Network Plus has been granted Section
214 authority by the FCC to provide international message telecommunications
services and private line services through the resale of international switched
voice and private line services and/or by using its own facilities and has on
file with the FCC tariffs applicable to its domestic interstate and
international services;
(iii) Network Plus is certified, registered or otherwise authorized,
or is not required to obtain authority to resell intrastate interexchange
telecommunications services in all U.S. states except Alaska. To the best of
such counsel's knowledge, Network Plus has a tariff on file in each of the
states in which a tariff is required to be filed;
(iv) (A) To the best of such counsel's knowledge except as set forth
in paragraph (v) of this letter, Network Plus (1) has filed all reports and
filings, and paid all fees, required by the FCC and the State Regulatory
Agencies except for those reports and filings the failure to file of which, and
those fees the failure to pay of which, would not have a material adverse effect
on the Company and Network Plus taken as a whole ("Material Adverse Effect");
and (2) based on such counsel's understanding of the Network Plus operations
from the Certificate, it has all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from (the "Authorizations"), and
has made all filings and registrations with the FCC and the State Regulatory
Agencies necessary to own, lease, license and use its properties and assets and
to conduct its business in the manner described in the Prospectus except for
those Authorizations the failure to obtain which, and those filings and
registrations the failure to file which, would not have a Material Adverse
Effect; and (B) to the best of such counsel's knowledge, Network Plus has not
received any notice of proceedings relating to the revocation or modification of
any such certificates, orders, permits, licenses, authorizations, consents or
approvals, or the disqualification or rejection of any such filing or
registration, the effect of which, singly or in the aggregate, would have a
Material Adverse Effect;
(v) To the best of such counsel's knowledge, based on such counsel's
understanding of the operations of Network Plus from the Certificate, other than
as stated in this paragraph (v) and on Schedule B, neither the Company nor
Network Plus is in violation of, or in default under, the Communications Act or
State Telecommunications Laws, the effect of which, singly or in the aggregate,
would have a Material Adverse Effect;
(vi) To the best of such counsel's knowledge (A) as of the date
hereof, no unsatisfied decree or order of the FCC or any State Regulatory Agency
is outstanding against the Company or its Subsidiary and (B) except as set forth
in Schedule C, no litigation, proceeding, inquiry or investigation has been
commenced or threatened, no complaints filed, no notice of violation or order to
show cause has been issued, against the Company or its Subsidiary before or by
the FCC or any State Regulatory Agency; and
<PAGE> 25
5
(vii) The statements in the Prospectus under the captions "Risk
Factors--Competition in our industry is intense and growing and we may be
unable to compete effectively", "Risk Factors--The Telecommunications Act of
1996 and other regulations could adversely affect us", "Business--Market
Opportunity", "Business--Competition" and "Government--Regulation", insofar as
such statements constitute a summary of the telecommunications legal matters,
documents or proceedings of the FCC and State Regulatory Agencies with respect
to telecommunications regulations referred to therein, are accurate in all
material respects and fairly summarize all such matters referred to therein.
In connection with the preparation of the Prospectus, such counsel
have participated in conferences with officers and representatives of the
Company, counsel for the Underwriters and corporate counsel to the Company, at
which conferences such counsel have made inquiries of such persons and others
and discussed the contents of the Prospectus. On the basis of such counsel's
participation, inquiries and discussions, no facts have come to such counsel's
attention that have caused them to believe that the sections in the Prospectus
under the captions "Risk Factors--Competition in our industry is intense and
growing and we may be unable to compete effectively", "Risk Factors--The
Telecommunications Act of 1996 and other regulations could adversely affect us",
"Business--Market Opportunity", "Business--Competition" and
"Government--Regulation", at the Time of Delivery, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
<PAGE> 1
EXHIBIT 10.8A
As of January 1, 1999
Network Plus, Inc.
Network Plus Corp.
234 Copeland Street
Quincy, MA 02169
Attn: Chief Financial Officer
RE: $60,000,000.00 LOAN AND SECURITY AGREEMENT
Gentlemen:
Reference is hereby made to that certain Loan and Security Agreement dated
as of October 7, 1998 (as amended, the "Loan Agreement") by and between Network
Plus Corp., a Delaware corporation ("Holdings") and Network Plus, Inc., a
Massachusetts corporation ("NPI"), as borrowers (individually and collectively,
jointly and severally, the "Borrower"), Fleet National Bank, a national banking
association, as Agent ("Agent"), and Goldman Sachs Credit Partners L.P., a
Bermuda limited partnership, as syndication and arrangement agent for the
Lenders (the "S&A Agent"), Fleet National Bank and the other lenders party
thereto from time to time (collectively, the "Lenders"). Capitalized terms used
herein and not otherwise defined shall have the meaning given to such term in
the Loan Agreement.
The Borrower has requested that the Agent and the Lenders amend certain
provisions of the Loan Agreement, as follows:
1. The Borrower, the Agent and the Lenders agree to amend Section 7.20(a)
of the Loan Agreement by deleting Section 7.20(a) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
(a) Profitability. Achieve operating EBITDA of not less than the amount
shown below for the one (1) month period (except for March 31, 1999,
which shall be for the 6 month period) corresponding thereto:
<PAGE> 2
Network Plus, Inc.
As of January 1, 1999
Page 2
---------------------------------- ------------------------
Period Minimum operating EBITDA
---------------------------------- ------------------------
for the 6 month period ending ($7,000,000)
March 31, 1999
---------------------------------- ------------------------
for the one month period ending ($1,800,000)
April 30, 1999
---------------------------------- ------------------------
for the one month period ending ($2,800,000)
May 31, 1999
---------------------------------- ------------------------
for the one month period ending ($2,700,000)
June 30, 1999
---------------------------------- ------------------------
for the one month period ending ($2,500,000)
July 31, 1999
---------------------------------- ------------------------
for the one month period ending ($2,200,000)
August 31, 1999
---------------------------------- ------------------------
for the one month period ending ($1,800,000)
September 30, 1999
---------------------------------- ------------------------
for the one month period ending ($1,600,000)
October 31, 1999
---------------------------------- ------------------------
for the one month period ending ($1,700,000)
November 30, 1999
---------------------------------- ------------------------
for the one month period ending ($1,600,000)
December 31, 1999
---------------------------------- ------------------------
for the one month period ending ($1,600,000)
January 30, 2000
---------------------------------- ------------------------
for the one month period ending ($1,600,000)
February 28, 2000
---------------------------------- ------------------------
for the one month period ending ($1,600,000)
March 31, 2000
---------------------------------- ------------------------
2. The Borrower, the Agent and the Lenders agree to amend Section 7.20(b)
of the Loan Agreement by deleting Section 7.20(b) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
<PAGE> 3
Network Plus, Inc.
As of January 1, 1999
Page 3
(b) Total Revenues. Achieve total revenues, determined in accordance with
GAAP, of not less than the amount shown below for the period
corresponding thereto:
---------------------------------- ------------------------
Period Minimum Total Revenue
---------------------------------- ------------------------
for the 6 month period ending $56,100,000
March 31, 1999
---------------------------------- ------------------------
for the 6 month period ending $61,500,000
June 30, 1999
---------------------------------- ------------------------
for the 6 month period ending $70,000,000
September 30, 1999
---------------------------------- ------------------------
for the 6 month period ending $79,500,000
December 31, 1999
---------------------------------- ------------------------
for the 6 month period ending $92,500,000
March 31, 2000
---------------------------------- ------------------------
3. The Borrower, the Agent and the Lenders agree to amend Section 7.20(c)
of the Loan Agreement by deleting Section 7.20(c) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
"(c) Maximum Revolving Line of Credit Debt to Annualized Quarterly
Revenue Ratio. Achieve a Revolving Line of Credit Debt to
Annualized Quarterly Revenue Ratio of 35% or less, measured on a
monthly basis."
4. The Borrower, the Agent and the Lenders agree to delete Section 7.20(d)
of the Loan Agreement in its entirety.
5. The Borrower, the Agent and the Lenders agree to amend Section 2.2(a)
of the Loan Agreement by deleting Section 2.2(a) of the Loan Agreement
in its entirety and by inserting the following in its place and stead:
"(a) Subject to the terms and conditions of this Agreement and during
the term of this Agreement, each Tranche B Lender severally agrees
to make advances ("Tranche B Advances") to Borrower in an amount
at any one time outstanding not to exceed such Tranche B Lender's
Pro Rata Share of the lesser of (i) the aggregate of the amount
collected, in cash, by the Borrower over the prior three (3) month
period from Accounts, as evidenced by a report to be furnished to
the Agent, MINUS, Tranche A Advances and (ii) the Maximum Tranche
B Amount (the "Tranche B Borrowing Base"). The Borrower agrees to
furnish the Agent with such information regarding the Borrower's
cash collections from Accounts at such
<PAGE> 4
Network Plus, Inc.
As of January 1, 1999
Page 4
time and in such form as the Agent may reasonably request.
Notwithstanding the foregoing, upon the receipt by Holdings of at
least Seventy Five Million Dollars ($75,000,000.00) in net cash
proceeds from the issuance and sale of common Stock of Holdings
and the contribution of such cash proceeds by Holdings to NPI,
and, subject to the terms and conditions of this Agreement and
during the term of this Agreement, each Tranche B Lender severally
agrees to make Tranche B Advances to Borrower in an amount at any
one time outstanding not to exceed such Lender's Pro Rata Share of
an amount equal to the Maximum Tranche B Amount."
6. The Borrower, the Agent and the Lenders agree to amend Section 7.3 of
the Loan Agreement by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, the Borrower may acquire an entity
whose total revenues as determined in accordance with GAAP for the
twelve (12) calendar month period ending immediately prior to the
date of such acquisition shall not exceed twenty five percent
(25%) of the then current annualized monthly revenue of the
Borrower as determined by the financial statements required to be
furnished to the Agent pursuant to Section 6.3(a) hereof;
provided, however, that the purchase price of any such acquisition
shall be paid only in common Stock of Holdings."
7. The Borrower, the Agent and the Lenders agree to amend Section 7.11 of
the Loan Agreement by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, Holdings may make distributions to
holders of the Series A Cumulative Preferred Stock in accordance
with the provisions of the Governing Documents so long as the
gross proceeds raised in connection with any public offering of
Holding's common Stock shall exceed One Hundred Fifteen Million
Dollars ($115,000,000.00)."
8. The Borrower, the Agent and the Lenders agree to delete Section 7.21 of
the Loan Agreement in its entirety.
In consideration of the forgoing amendments, upon execution of this letter
agreement, and as a condition precedent to the effectiveness hereof, the
Borrower shall pay to the Agent the sum of $125,000, to be distributed by the
Agent pro rata to all Participants. In addition, the Borrower
<PAGE> 5
Network Plus, Inc.
As of January 1, 1999
Page 5
shall pay the Agent a monthly administration fee of $10,000 on the 28th day of
each month, commencing May 28, 1999 until the Maturity Date. Further, upon
execution of this letter agreement, Holdings shall issue a Warrant in favor of
each Lender, in form and substance acceptable to the Agent, for the purchase of
such Lender's Pro Rata Share of 5,000 shares of the common stock of Holdings at
a price of .01 cent per share. Upon execution of this letter agreement, and as a
condition precedent to the effectiveness hereof, the Borrower shall also pay any
and all amounts owed to the S&A Agent under or in respect of that certain letter
agreement executed by the Borrower dated ____, which amount is $480,0000.00
through June 1, 1999.
The Agent and the Lenders hereby consent to the purchase by Holdings of
138,888 shares (the "NorthPoint Stock") of common stock of NorthPoint
Communications, Inc. ("NorthPoint") on March 23, 1999. In consideration of the
foregoing consent, upon the execution of this letter agreement, Holdings shall
execute and deliver to the Agent a Pledge Agreement, in form and substance
acceptable to the Agent, pursuant to which Holdings will pledge the NorthPoint
Stock to the Agent for the benefit of the Lenders, as additional collateral for
the Loan.
Notwithstanding anything to the contrary contained herein or in the Loan
Agreement, the Borrower acknowledges and agrees that the Lenders shall have no
continuing and further obligation to make Advances after September 30, 1999
unless Holdings shall have received net cash proceeds of at least Seventy Five
Million Dollars ($75,000,000.00) from the issuance and sale of Holding's common
Stock and such net cash proceeds shall have been contributed by Holdings to NPI
as a capital contribution (the "Equity Injection"). After September 30, 1999,
provided there shall not have occurred and be continuing an Event of Default and
provided that the Borrower shall be in compliance with all terms and conditions
of the Loan Agreement, the Borrower may once again request Advances in
accordance with the terms and conditions of the Loan Agreement after such time
as the Equity Injection is made.
Notwithstanding the foregoing amendments, the Agent's and the Lenders'
failure to insist upon the strict performance of Section 7.20(a) of the Loan
Agreement, or of any other term, condition or provision of the Loan Agreement,
now or in the future, shall not affect or alter the Loan Agreement, except as
provided herein, and each and every term, condition and other provision of the
Loan Agreement shall continue in full force and effect, except as provided
herein. The foregoing amendments shall not constitute a future amendment or
waiver of Section 7.20(a) of the Loan Agreement, or any other term, condition,
or provision of the Loan Agreement, except as provided herein. The Borrower
ratifies and confirms all of the representations, warranties and covenants
contained in the Loan Agreement as modified hereby and agree that the Agent and
the Lenders may continue to rely upon all of the representations, warranties and
covenants contained therein.
<PAGE> 6
Network Plus, Inc.
As of January 1, 1999
Page 6
Very truly yours,
Fleet National Bank, as Agent and a Lender
By: /s/ Raymond C. Hoefling
----------------------------
Name: Raymond C. Hoefling
Title: Vice President
<PAGE> 7
Network Plus, Inc.
As of January 1, 1999
Page 7
Goldman Sachs Credit Partners, L.P., as
S&A Agent and a Lender
By: /s/ John Urbon
-----------------------------
Name: John Urbon
---------------------------
Title: Authorized Signatory
--------------------------
<PAGE> 8
Network Plus, Inc.
As of January 1, 1999
Page 8
Transamerica Business Credit Corporation,
as a Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[no signature required]
<PAGE> 9
Network Plus, Inc.
As of January 1, 1999
Page 9
Fremont Financial Corporation,
as a Lender
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[no signature required]
<PAGE> 10
Network Plus, Inc.
As of January 1, 1999
Page 10
Accepted and Agreed as of the 1st day of January, 1999
Network Plus, Inc., as Borrower
By: /s/ George Alex
-------------------------------
Name: George Alex
-----------------------------
Title: Executive Vice President
----------------------------
Network Plus Corp., as Borrower
By: /s/ George Alex
-------------------------------
Name: George Alex
-----------------------------
Title: Executive Vice President
----------------------------
cc: PricewaterhouseCoopers
