<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 2000
REGISTRATION NO. 333-32040
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
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
NETWORK PLUS CORP.
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,
other than securities offered only in connection with dividend or interest
reinvestment plans, 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 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.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 2 to Form S-1 (File No. 333-32040) of Network Plus Corp.
is filed solely to file the exhibits listed in Item 16 and the Exhibit Index.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
1 -- Form of Underwriting Agreement.
4.1(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(2) -- Form of Common Stock Certificate.
4.3 -- Form of Certificate of Designation for % Series A
Cumulative Convertible Preferred Stock.
4.4 -- Form of Deposit Agreement for Depositary Shares representing
% Series A Cumulative Convertible Preferred Stock.
5 -- Opinion of Hale and Dorr LLP.
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 (included on the signature page of this
registration statement).
27+ -- Financial Data Schedule.
</TABLE>
- ---------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-64633).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-79479).
+ Previously filed.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to Registration Statement on Form S-3 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Quincy, State of Massachusetts, as of April 5, 2000.
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-3 has been signed below by
the following persons, in the capacities indicated, as of April 5, 2000.
<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
* Executive Vice President of Finance, Chief
- ----------------------------------------------------- Financial Officer and Treasurer (Principal
George Alex Financial and Accounting Officer)
* Director
- -----------------------------------------------------
David D. Martin
* Director
- -----------------------------------------------------
Joseph C. McNay
</TABLE>
*By: /s/ JAMES J. CROWLEY
-----------------------------------------------------
James J. Crowley
Attorney-in-fact
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C> <C>
1 -- Form of Underwriting Agreement.
4.1(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(2) -- Form of Common Stock Certificate.
4.3 -- Form of Certificate of Designation for % Series A
Cumulative Convertible Preferred Stock.
4.4 -- Form of Deposit Agreement for Depositary Shares representing
% Series A Cumulative Convertible Preferred Stock.
5 -- Opinion of Hale and Dorr LLP.
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 (included on the signature page of this
registration statement).
27+ -- Financial Data Schedule.
</TABLE>
- ---------------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-64633).
(2) Incorporated by reference to the Company's Registration Statement on Form
S-1 (File No. 333-79479).
+ Previously filed.
<PAGE> 1
Exhibit 1
NETWORK PLUS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
April [6], 2000
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Fidelity Capital Markets, a division of National Financial Services Corporation
Kaufman Bros., L.P.
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
[4,509,804] shares and, at the election of the Underwriters, up to [750,000]
additional shares of Common Stock ("Stock") of the Company and the stockholders
of the Company named in Schedule I hereto (the "Selling Stockholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of [490,198] shares. The aggregate of [5,000,000] shares to be sold
by the Company and the Selling Stockholders is herein called the "Firm Shares"
and the [750,000] additional shares to be sold by the Company are 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. (a) The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-32040) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein but including all documents incorporated
by reference in the prospectus contained therein, 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 or document
incorporated by reference therein 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
<PAGE> 2
2
462(b) Registration Statement, if any, including all exhibits thereto
and including (i) 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 6(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 and (ii) the documents incorporated
by reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became 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, 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"); and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;
(ii) 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 or
by a Selling Stockholder expressly for use in the preparation of the
answers therein to Item 7 on Form S-3;
(iii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; 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;
<PAGE> 3
3
(iv) 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. or by a Selling Stockholder expressly for
use in the preparation of the answers therein to Item 7 on Form S-3;
(v) Neither the Company nor Network Plus, Inc., a Massachusetts
corporation (the "Subsidiary"), which is the only direct or indirect
subsidiary of the Company (other than an Australian subsidiary of the
Subsidiary, which to date has no business operations that are material
to the Company), has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or material 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 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;
(vi) 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;
(vii) 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
<PAGE> 4
4
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction;
(viii) The Company 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, in the case of the Stock,
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 (except as described in the Prospectus); there are no
restrictions on subsequent transfers of the Shares under the securities
laws of the United States except as set forth in the Prospectus, as
amended or supplemented;
(ix) 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;
(x) 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:
(A) result in any violation of the provisions of the
charter, by-laws or resolutions of the directors or
shareholders of the Company or its Subsidiary;
(B) 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
(C) result in any violation of any law, rule or
regulation or any judgment, order or decree 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,
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
described in the Prospectus ("Prospects"), affairs, management,
financial position, shareholders' equity or results of operation of the
Company and its Subsidiary, taken as a whole;
(xi) 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;
<PAGE> 5
5
(xii) 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;
(xiii) 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;
(xiv) 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 we may be unable to compete effectively" and "The
Telecommunications Act of 1996 and other regulation could adversely
affect us", "Competition", "Government Regulation", "Description of
Certain Indebtedness and Convertible Preferred Stock Offering", and the
sixth paragraph under "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate and complete;
(xv) 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, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xvi) This Agreement has been duly and validly authorized,
executed and delivered by the Company and the Selling Stockholders 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, the
discretion of the court before which any proceeding therefor may be
brought and principles equity regarding availability of remedies and
(ii) as any rights to indemnity or contribution thereunder may be
limited by applicable Securities laws;
<PAGE> 6
6
(xvii) 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");
(xviii) 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;
(xix) 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;
(xx) The Company and its Subsidiary are not, as of the
date hereof, and will not be at any Time of Delivery, as defined below,
in violation of their respective charters, by-laws or resolutions of
their directors or shareholders;
(xxi) 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, stockholders' 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;
(xxii) 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; and
(xxiii) The audited consolidated financial statements of the
Company as of December 31, 1999 and for the year then ended (including
the notes thereto) included in the Prospectus present fairly in all
material respects the consolidated financial position of the Company as
of that date and have 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 Prospectus 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.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and
such Selling Stockholder has full right, power and authority to enter
into this Agreement, the Power-of-Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of
the provisions of this
<PAGE> 7
7
Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such Selling
Stockholder is a corporation or the Partnership Agreement of such
Selling Stockholder if such Selling Stockholder is a partnership or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over such Selling Stockholder or the
property of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to the
Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold by
such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters;
(iv) During the period beginning from the date hereof and
continuing to and including the date 90 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; provided, however, that such Selling Stockholder (a) may
transfer such Shares (i) as a bona fide gift or gifts, provided that
the donee or donees thereof agree to be bound in writing by the
restrictions set forth in this section (iv), (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family
of the undersigned, provided that the trustee of the trust agrees to be
bound in writing by the restrictions set forth in this section (iv),
and provided further that any such transfer shall not involve a
disposition for value, or (iii) with the prior written consent of
Goldman, Sachs & Co. on behalf of the Underwriters, (b) may sell Shares
in the Offering in the amount held by such Selling Stockholder as
stated in Schedule I to the Underwriting Agreement and (c) may exercise
stock options held by such Selling Stockholder that are outstanding on
the date of this Agreement;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
<PAGE> 8
8
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished to
you (the "Custody Agreement"), duly executed and delivered by such
Selling Stockholder to the Company, as custodian (the "Custodian"), and
such Selling Stockholder has duly executed and delivered a Power of
Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule I hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder, to determine the
purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the delivery
of the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection
with the transactions contemplated by this Agreement and the Custody
Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such
Selling Stockholder of the Attorneys-in-Fact by the Power of Attorney,
are to that extent irrevocable; the obligations of the Selling
Stockholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of
any other event; if any individual Selling Stockholder or any such
executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should
occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid
as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Stockholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Stockholders, at a purchase price per share of $.............., the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Shares to be sold by the
Company and each of the Selling Stockholders as set forth opposite their
respective names in Schedule I hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from the Company and all of the Selling Stockholders
hereunder and (b) in the event and to the extent that the Underwriters
<PAGE> 9
9
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 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 I 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 750,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering sales of
shares in excess of the number of 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 and the Attorneys-in-Fact 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 and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders 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 one or more accounts specified by the Company and each of
the Selling Stockholders as their interests may appear to Goldman, Sachs & Co.
at least 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 [ ], 2000 or such other time and date as Goldman, Sachs & Co., the
Company and the Selling Stockholders 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., the Company and the Selling
Stockholders 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 8 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(k) 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 [ ]
p.m., New York City time, on the New York Business Day next preceding such Time
of Delivery, at
<PAGE> 10
10
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 file promptly all reports and
any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the prospectus and
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the shares; 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 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 or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply with the Act, to notify you and upon your request to file such
document and 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
<PAGE> 11
11
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 90 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 (a) pursuant to employee or director stock
option plans existing on, or upon the conversion or exchange of
convertible or exchangeable Shares outstanding as of, the date of this
Agreement and (b) in connection with mergers, acquisitions or other
business combinations, provided, in the case of this clause (b), that
the acquiror or buyer of such Shares agrees not to issue, sell, offer
or agree to sell such Shares during such 90-day period), 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;
(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 subsidiaries 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";
<PAGE> 12
12
(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 or
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 and each of the Selling Stockholders covenant and
agree with one another and with the several Underwriters that (a) the Company
and the Selling Stockholders will pay or cause to be paid their respective pro
rata share based on the number of Shares to be sold by the Company or Selling
Stockholder hereunder, as the case may be, 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 6(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 ; (b) the Company will pay
or cause to be paid (i) the cost of preparing stock certificates; (ii) the cost
and charges of any transfer agent or registrar and (iii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; and (c) such Selling
Stockholder will pay or cause to be paid all costs and expenses incident to the
performance of such Selling Stockholder's obligations hereunder which are not
otherwise specifically provided for in this Section, including (i) any fees and
expenses of counsel for such Selling Stockholder, (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the Attorneys-in-Fact
and the Custodian, and (iii) all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder. In connection with clause (c) of the preceding sentence,
Goldman, Sachs & Co. agrees to pay New York State stock transfer tax, and the
Selling Stockholder agrees to reimburse Goldman, Sachs & Co. for associated
carrying costs if such tax payment is not rebated on the day of payment and for
any portion of such tax payment not rebated. It is understood, however, that the
Company shall bear, and the Selling Stockholders shall not be required to pay or
to reimburse the Company for, the cost of any other matters not directly
relating to the sale and purchase of the Shares pursuant to this Agreement, and
that, except as provided in this Section, and Section 9 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.
<PAGE> 13
13
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 and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their 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 6(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) Hale and Dorr LLP, counsel for the Selling Stockholders, shall
have furnished to you such written opinion or opinions dated such Time
of Delivery, in form and substance satisfactory to you, substantially
in the form set forth in Schedule 7(d).
(f) 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 LLP 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);
(g)(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
<PAGE> 14
14
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;
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's securities 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;
(i) 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;
(j) The Shares at such Time of Delivery shall have been duly
listed for quotation on NASDAQ;
(k) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from Robert T. Hale and the New Breeze
Foundation, substantially to the effect set forth in Subsection 5(e)
hereof in form and substance satisfactory to you;
(l) The Company shall have complied with the provisions of Section
6(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(m) The Company and the Selling Stockholders shall have furnished
or caused to be furnished to you at such Time of Delivery certificates
of officers of the Company and the Selling Stockholders, respectively
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively
herein at and as of such Time of Delivery, as to the performance by the
Company and the Selling Stockholders of all of their respective
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 and Robert T. Hale, jointly and
severally, 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
<PAGE> 15
15
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 and Robert T. Hale 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; and provided further, that the (i) liability of Robert T. Hale pursuant
to this subsection 8(a) shall not exceed the product of the number of Shares
sold by Robert T. Hale and the initial public offering price of the Shares as
set forth in the Prospectus and (ii) and the Underwriters shall have first made
demand for payment of any amounts due under this subsection 8(a) against the
Company and the Company shall have failed to make payment of all or any
substantial portion of such amounts within 30 days following such demand prior
to making any demand for payment against Robert T. Hale.
(b) The New Breeze Foundation 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, 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 The New
Breeze Foundation expressly for use therein; 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 New Breeze Foundation 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; and provided further, that the liability of The New
Breeze Foundation pursuant to this subsection 8(a) shall not exceed the product
of the number of Shares sold by The New Breeze Foundation and the initial public
offering price of the Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company
and each Selling Stockholder against any losses, claims, damages or liabilities,
joint or several, to which the Company or such Selling Stockholder 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, 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 and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such
<PAGE> 16
16
Selling Stockholder in connection with investigating or defending any such
action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) 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), (b) or (c), 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.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) 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 and the Selling Stockholders 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 indemnified party failed to give the
notice required under subsection (d) 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 and the Selling Stockholders 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 and the Selling Stockholders 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 of the Shares purchased
under this Agreement (before deducting expenses) received by the Company and the
Selling Stockholders 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
<PAGE> 17
17
material fact relates to information supplied by the Company or the Selling
Stockholders 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, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) 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 (e). 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 (e) 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 (e),
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, Underwriters and
distributed to the public were offered to the public, exceeds the amount of any
damages which such Underwriter 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 (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 9 shall be in addition to any liability which the Company and the
respective Selling Stockholders 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 or any Selling Stockholder 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 and the Selling Stockholders 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 and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company notifies you that they have so arranged for the purchase
of such Shares, you or the Company and the Selling Stockholders shall have the
right to postpone a Time of Delivery for a period of not more than 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 and
the Selling Stockholders 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 and the Selling Stockholders 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
<PAGE> 18
18
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 and
the Selling Stockholders 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 and the Selling Stockholders 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 and the Selling Stockholders to sell
the Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Stockholders,
except for the expenses to be borne by the Company and the Selling Stockholders
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, the Selling Stockholders 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 of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Section 6 hereof; but, if for
any other reason the Shares are not delivered by or on behalf of the Company and
the Selling Stockholders as provided herein, the Company and each of the Selling
Stockholders pro rata (based on the number of Shares to be sold by the Company
and such Selling Stockholders hereunder), 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 and the Selling Stockholders shall then be under no further liability to
any Underwriter in respect of the Shares not so delivered except as provided in
Section 6 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; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
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 or any Selling Stockholder 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
<PAGE> 19
19
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 the Selling
Stockholder 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 the Selling Stockholders 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, any Selling Stockholder 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.
<PAGE> 20
20
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
and each of the Selling Stockholders. 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 and the Selling Stockholders 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:
SELLING STOCKHOLDERS
By:
-----------------------------------
Name: James J. Crowley
Title: Attorney-in-Fact for
the Selling Stockholders,
not individually
Accepted as of the date hereof,
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Fidelity Capital Markets, a division of National Financial
Services Corporation
Kaufman Bros., L.P.
By:
-----------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 21
21
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 Securities Corporation....................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.....................
Fidelity Capital Markets, a division of National Financial
Services Corporation................................................
Kaufman Bros., L.P.....................................................
Total..................................................................
</TABLE>
<TABLE>
<CAPTION>
SELLING STOCKHOLDERS TOTAL NUMBER ATTORNEY-IN-FACT
OF FIRM SHARES
TO BE SOLD
----------
<S> <C>
Robert T. Hale.............................. James J. Crowley
New Breeze Foundation....................... James J. Crowley
</TABLE>
<PAGE> 22
ANNEX I
Pursuant to Section 7(f) 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 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
<PAGE> 23
2
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 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> 24
Schedule 7(b)
[To be replaced by draft of actual opinion]
<PAGE> 25
2
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. Section 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
(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
<PAGE> 26
3
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> 27
4
Schedule 7(d)
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder of this
Agreement and the Power of Attorney and the Custody Agreement hereinafter
referred to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling Stockholder
has full right, power and authority to enter into this Agreement, the
Power-of-Attorney and the Custody Agreement and to sell, assign, transfer and
deliver the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder with all of
the provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of such Selling
Stockholder if such Selling Stockholder is a corporation or the Partnership
Agreement of such Selling Stockholder if such Selling Stockholder is a
partnership or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling Stockholder or
the property of such Selling Stockholder; and
(iii) Such Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 of the Underwriting Agreement)
such Selling Stockholder will have, good and valid title to the Shares to be
sold by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares, free and clear of
all liens, encumbrances, equities or claims, will pass to the several
Underwriters.
<PAGE> 1
Exhibit 4.3
NETWORK PLUS CORP.
CERTIFICATE OF DESIGNATIONS OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF [ ]% SERIES A
CUMULATIVE CONVERTIBLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Network Plus Corp. (the "Company"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (the "Board of Directors") by its Restated Certificate of
Incorporation, as amended (hereinafter referred to as the "Restated Certificate
of Incorporation"), and pursuant to the provisions of Sections 141(c)(2) and 151
of the General Corporation Law of the State of Delaware, said Board of Directors
is authorized to issue Preferred Stock of the Company in one or more series and
has duly approved and adopted the following resolution on [ ], 2000 (the
"Resolution"):
RESOLVED that, pursuant to the authority vested in the Board
of Directors by its Restated Certificate of Incorporation, the Board of
Directors does hereby create, authorize and provide for the issuance of
[ ]% Series A Cumulative Convertible Preferred Stock, par value $.01
per share, with a liquidation preference of $500 per share, consisting
of 500,000 shares having the designations, preferences, relative,
participating, optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth
in the Restated Certificate of Incorporation and in this Resolution as
follows:
(a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Company a series of Preferred Stock
designated as the "[ ]% Series A Cumulative Convertible Preferred Stock" (the
"Convertible Preferred Stock"). The number of shares constituting the
Convertible Preferred Stock shall be 500,000. The liquidation preference of the
Convertible Preferred Stock shall be $500 per share (the "Liquidation
Preference").
Capitalized terms used herein but not defined shall have the meanings
assigned to them in paragraph (o).
(b) Rank. The Convertible Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up and dissolution, rank
(i) junior to all of the Company's existing and future indebtedness and
other obligations;
<PAGE> 2
2
(ii) on parity with any other class of Capital Stock or preferred
shares established by the Company after [ ], 2000, the terms of which
expressly provide that such class or series will rank on a parity with
the Convertible Preferred Stock as to dividend distribution and
distributions upon liquidation, winding-up and dissolution of the
Company, or "parity" securities; and
(iii) senior to all classes of Common Stock and to each other class of
Capital Stock of the Company or series of preferred stock of the
Company established after [ ], 2000, the terms of which do not
expressly provide that such class or series ranks senior to or on a
parity with the Convertible Preferred Stock as to dividend
distributions and distributions upon liquidation, winding-up and
dissolution of the Company, or "junior" securities.
The Company may not, without the affirmative vote or consent
of the holders of at least 662/3% of the outstanding shares of Convertible
Preferred Stock, authorize, create, by way of reclassification or otherwise or
issue any class or series of Capital Stock of the Company ranking senior to the
Convertible Preferred Stock, or "senior" securities, or any obligation or
security convertible or exchangeable into or evidencing a right to purchase,
shares of any senior securities.
(c) Dividends. (i) Holders of the outstanding shares of Convertible
Preferred Stock will be entitled to receive, when, as and if declared by the
Board of Directors of the Company, out of funds legally available therefor,
dividends on each share from the Issue Date of the Convertible Preferred Stock
accumulating at the rate of $[ ] per share of Convertible Preferred Stock per
annum, or $[ ] per share of Convertible Preferred Stock per quarter, payable
quarterly in arrears on April 1, July 1, October 1 and January 1 of each year
(each, a "Dividend Payment Date") or, if any such date is not a business day, on
the next succeeding business day, to the holders of record as of the next
preceding March 15, June 15, September 15 and December 15 (each, a "Record
Date"). Accumulated but unpaid dividends, if any, may be paid on such dates as
determined by the Board of Directors. Dividends will be payable in cash except
as set forth below. The first dividend payment of $[ ] per share of Convertible
Preferred Stock will be payable on July 1, 2000.
(ii) All dividends on the Convertible Preferred Stock, to the
extent accumulated, shall be cumulative, whether or not earned or declared, on a
daily basis from the last date through which dividends have been paid or, if no
dividends have been paid, from the Issue Date. Dividends will accumulate to the
extent they are not paid on the Dividend Payment Date for the quarter to which
they relate. Accumulated unpaid dividends will accrue and cumulate at a rate of
[ ]% per annum. The Company will take all reasonable actions required or
permitted under Delaware law to permit the payment of dividends on the
Convertible Preferred Stock.
(iii) Any dividend on the Convertible Preferred Stock shall
be, at the option of the Company, payable (A) in cash, (B) through the issuance
of a number of shares (rounded up or down to the nearest whole number) of Common
Stock (hereinafter referred to as "Dividend Common Stock") determined as set
forth in the next paragraph or (C) a combination thereof.
(iv) Dividends may, at the option of the Company, be paid in
Common Stock. If the Company elects to pay any dividend with Dividend Common
Stock, the
<PAGE> 3
3
Company will give the Holders of the Convertible Preferred Stock 10 trading days
(as defined herein) notice prior to the related Dividend Payment Date. If the
Company elects to pay any dividend with Dividend Common Stock, the number of
shares of Dividend Common Stock to be distributed will be calculated by dividing
the amount of such dividend otherwise payable in cash by 95% of the arithmetic
average of the closing price (as defined below) for the 5 trading days preceding
the Dividend Payment Date. The Convertible Preferred Stock will not be
redeemable unless all dividends accrued through such redemption date shall have
been paid in full. The Company shall not be required to declare or pay a
dividend if another person, including, without limitation, any of its
Subsidiaries, pays an amount to the Holders of the Convertible Preferred Stock
equal to the amount of such dividend on the Company's behalf and, in such event,
the dividend will be deemed paid for all purposes.
(v) All dividends paid with respect to shares of the
Convertible Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata
to the holders entitled thereto.
(vi) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
the Convertible Preferred Stock with respect to any Dividend Period unless all
dividends for all preceding Dividend Periods have been declared and paid or
declared and a sufficient sum set apart for the payment of such dividend, upon
all outstanding shares of Convertible Preferred Stock. Unless all dividends on
all outstanding shares of Convertible Preferred Stock due for all past dividend
periods shall have been declared and paid, or declared and a sufficient sum for
the payment thereof set apart, then:
(A) no dividend, other than a dividend payable solely in shares of
junior securities or options, warrants or rights to purchase junior
securities, shall be declared or paid upon, or any sum set apart for
the payment of dividends upon, any shares of junior securities;
(B) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any shares of
junior securities;
(C) no shares of junior securities shall be purchased, redeemed or
otherwise acquired or retired for value, excluding an exchange for
shares of other junior securities or a purchase, redemption or other
acquisition from the proceeds of a substantially concurrent sale of
junior securities, by the Company or any Subsidiary; and
(D) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other
acquisition or retirement for value of any shares of junior securities
by the Company or any Subsidiary.
Holders of the Convertible Preferred Stock will not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of the dividends as herein described.
(iv) The Company will not (A) declare, pay or set apart funds
for the payment of any dividend or other distribution with respect to any junior
securities or (B) redeem, purchase or otherwise acquire for consideration any
junior securities through a sinking fund or otherwise, unless (1) all accrued
and unpaid dividends with respect to
<PAGE> 4
4
the Convertible Preferred Stock and any parity securities at the time such
dividends are payable have been paid or funds have been set apart for payment of
such dividends and (2) sufficient funds have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the
Convertible Preferred Stock and any parity securities. Notwithstanding anything
in this Certificate of Designations to the contrary, the Company may declare and
pay dividends on parity securities which are payable solely in additional shares
of or by the increase in the liquidation value of parity securities or junior
securities or on junior securities which are payable in additional shares of or
by the increase in the liquidation value of junior securities, as applicable, or
repurchase, redeem or otherwise acquire junior securities in exchange for junior
securities and parity securities in exchange for parity securities or junior
securities.
(v) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption may be declared
and paid at any time, without reference to any regular Dividend Payment Date, to
holders of record on the Business Day immediately prior to the payment thereof,
as may be fixed by the Board of Directors of the Company.
(vi) Dividends payable on the Convertible Preferred Stock for
any period other than a Dividend Period shall be computed on the basis of a
360-day year consisting of twelve 30-day months and will be deemed to accrue on
a daily basis. If a Dividend Payment Date is not a Business Day, payment of
dividends shall be made on the next succeeding Business Day and dividends
accruing for the intervening period shall be paid on the next succeeding
Dividend Payment Date.
(d) Liquidation Preference. (i) Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, after payment in full of
the Liquidation Preference (and any accumulated and unpaid dividends) on any
senior securities, Holders of Convertible Preferred Stock will be entitled to be
paid, out of the assets of the Company available for distribution to its
stockholders, on an equal basis with the holders of any outstanding parity
securities, the Liquidation Preference of the outstanding shares of Convertible
Preferred Stock, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends (whether or not earned or declared) thereon to
the date fixed for liquidation, dissolution or winding-up (including an amount
equal to a prorated dividend for the period from the last Dividend Payment Date
to the date fixed for liquidation, dissolution or winding-up that would have
been payable had the Convertible Preferred Stock been the subject of a
redemption on such date pursuant to paragraph (e)(i)) before any distribution is
made on any junior securities. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable with
respect to the Convertible Preferred Stock and all parity securities are not
paid in full, the Convertible Preferred Stock and the parity securities will
share equally and ratably (in proportion to the respective amounts that would be
payable on such shares of Convertible Preferred Stock and the parity securities,
respectively, if all amounts payable thereon had been paid in full) in any
distribution of assets of the Company to which each is entitled. After payment
of the full amount of the Liquidation Preference of the outstanding shares of
Convertible Preferred Stock (and, if applicable, an amount equal to a prorated
dividend), the Holders of shares of Convertible Preferred Stock will not be
entitled to any further participation in any distribution of assets of the
Company.
<PAGE> 5
5
(ii) For the purposes of this paragraph (d), neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more other entities shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding-up of the Company unless such sale,
conveyance, exchange, transfer, consolidation or merger shall be in connection
with a liquidation, dissolution or winding up of the affairs of the Company or a
reduction or decrease in Capital Stock.
(e) Redemption. (i) Optional Redemption. (A) The Convertible Preferred
Stock shall not be redeemable at the option of the Company prior to April 10,
2005. On or after April 10, 2005, each share of the Convertible Preferred Stock
may be redeemed (subject to the legal availability of funds therefor) at any
time, in whole or in part, at the option of the Company, at the redemption
prices set forth below (expressed as percentages of the Liquidation Preference
thereof) plus, without duplication, an amount equal to all accrued and unpaid
dividends to the "redemption effective date", upon not less than 15 nor more
than 60 days prior written notice, during the 12-month period commencing on
[ ] of each of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- -----
<S> <C>
2005......................................... %
2006......................................... %
2007......................................... %
2008......................................... %
2009......................................... %
2010......................................... %
2011......................................... %
2012......................................... %
</TABLE>
If any date set forth above is not a Business Day then the
period beginning on that day will start on the next succeeding Business Day.
(B) In the case of a redemption date falling after a Record
Date and prior to the related Dividend Payment Date, the Holders of the
Convertible Preferred Stock at the close of business on such record date will be
entitled to receive the dividend payable on such shares on the corresponding
Dividend Payment Date, notwithstanding the redemption of such shares following
such record date. Except as provided for in the preceding sentence, no payment
or allowance will be made for accrued dividends on any shares of Convertible
Preferred Stock called for redemption.
(C) The Company must give the Holders of the Convertible
Preferred Stock 30 days' prior notice of its intention to satisfy the Company's
redemption payment obligation by delivering Common Stock instead of cash.
(ii) Procedure for Redemption. (A) The "redemption effective
date" will be a Business Day specified as such date in the Redemption Notice (as
defined below). On the redemption effective date:
<PAGE> 6
6
(1) all consideration to be paid as part of the redemption price will
become payable,
(2) all dividends on the Convertible Preferred Stock to be redeemed
will cease to accrue, and
(3) the right to convert the Convertible Preferred Stock to be redeemed
will cease at the close of business.
(B) As described below, if any shares of Common Stock are to
be delivered as part of the redemption price,
(1) the number of shares of Common Stock to be delivered will be
determined on the basis of 95% of the average of the closing market
prices of those shares for the 10 "trading days", which is each Monday,
Tuesday, Wednesday, Thursday or Friday, other than any day on which
securities are not traded on the applicable securities exchange or in
the applicable securities market, following the redemption effective
date, and
(2) those shares will be deliverable on the 14th trading day following
the redemption effective date.
(C) With respect to a redemption pursuant to paragraph (e)(i),
the Company will send a written notice of redemption by first class mail to each
Holder of shares of Convertible Preferred Stock, not fewer than 30 days nor more
than 60 days prior to the Redemption Date at its registered address (the
"Redemption Notice"); provided, however, that no failure to give such notice nor
any deficiency therein shall affect the validity of the procedure for the
redemption of any shares of Convertible Preferred Stock to be redeemed except as
to the Holder or Holders to whom the Company has failed to give said notice or
except as to the Holder or Holders whose notice was defective. Each Redemption
Notice must specify:
(1) the redemption effective date,
(2) the redemption price,
(3) the form of consideration to be paid, and
(4) if any portion of the redemption price is to be paid by the
delivery of Common Stock, the method for determining the applicable
average market value and the date on which the shares of Common Stock
will be deliverable.
In the case of any partial redemption, the Company will select
the shares of Convertible Preferred Stock to be redeemed on a pro rata basis, by
lot or any other method that the Company believes is fair and appropriate,
provided that the Company may redeem all shares held by Holders of fewer than
100 shares of Convertible Preferred Stock following such redemption, prior to
the Company's redemption of other Convertible Preferred Stock.
If the redemption effective date falls after a dividend
payment record date and before the related Dividend Payment Date, the Holders of
Convertible Preferred
<PAGE> 7
7
Stock at the close of business on that dividend payment record date will be
entitled to receive the dividend payable on those shares on the corresponding
Dividend Payment Date, even if those shares are redeemed after that dividend
payment record date.
The number of shares of Common Stock to be delivered to the
Holders of Convertible Preferred Stock will be the amount of the redemption
payment divided by the market price of the Common Stock, determined as described
in this subsection (C).
(D) Each holder of Convertible Preferred Stock shall surrender
the certificate or certificates representing such shares of Convertible
Preferred Stock to the Company, duly endorsed (or otherwise in proper form for
transfer, as determined by the Company), in the manner and at the place
designated in the Redemption Notice, and on the Redemption Date the full
Optional Redemption Price for such shares shall be payable to the person whose
name appears on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event that less
than all of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(E) Mandatory Redemption. Unless it has already been redeemed
or converted, the Company will be required to redeem the Convertible Preferred
Stock on April 1, 2012 at a redemption price equal to 100% of the Liquidation
Preference, together with accumulated and unpaid dividends to the mandatory
redemption date.
(F) Repurchase at the Option of Holders. If the Company
experiences a change of control, unless the Company has delivered a Redemption
Notice in connection with the Convertible Preferred Stock pursuant to the
provisions described above, each holder of Convertible Preferred Stock will have
the right to require the Company to repurchase all or any part of the holder's
Convertible Preferred Stock pursuant to an offer (the "change of control
offer"), on the terms set forth herein. In the change of control offer, the
Company will offer a payment in cash equal to 100% of the Liquidation Preference
of Convertible Preferred Stock repurchased plus all accumulated and unpaid
dividends and liquidated damages, if any, thereon, to the date of purchase,
subject to the right of holders of record on the relevant record date to receive
dividends due on the relevant dividend payment date. Within 30 days following
any change of control, the Company will mail a notice to each holder describing
the transaction or transactions that constitute the change of control and
offering to repurchase Convertible Preferred Stock on the date specified in such
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures required by this
Certificate of Designations and described in such notice.
The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations to the
extent those laws and regulations are applicable in connection with the purchase
of the Convertible Preferred Stock as a result of a change of control. To the
extent that the provisions of any securities laws or regulations conflict with
the change of control provisions of this Certificate of Designations, the
Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under the change of control
provisions herein by virtue of such conflict.
On the date scheduled for payment of the Convertible Preferred
Stock, the Company will, to the extent lawful:
<PAGE> 8
8
- - accept for payment all Convertible Preferred Stock or portions thereof
properly tendered;
- - deposit with the Transfer Agent an amount of consideration equal to the
change of control payment in respect of all Convertible Preferred Stock
or portions thereof so tendered; and
- - deliver or cause to be delivered to the Transfer Agent for cancellation
the Convertible Preferred Stock so accepted together with an officers'
certificate stating the aggregate Liquidation Preference of the
Convertible Preferred Stock or portions thereof being purchased by the
Company.
The Transfer Agent will promptly mail to each Holder of shares
of Convertible Preferred Stock so tendered the applicable payment for those
shares of Convertible Preferred Stock, and the Transfer Agent will promptly
authenticate and mail, or cause to be transferred by book entry, to each holder
a new Convertible Preferred Stock certificate equal in liquidation preference to
any unpurchased portion of the Convertible Preferred Stock surrendered, if any.
Prior to complying with any of the provisions of the change of
control covenant, but in any event within 90 days following a change of control,
the Company will either repay all outstanding obligations under the Existing
Credit Facility or the Senior Secured Credit Facilities or obtain the requisite
consents, if any, under all agreements governing the Company's outstanding
indebtedness to permit the repurchase of Convertible Preferred Stock required by
this repurchase obligation. The Company will publicly announce the results of
the change of control offer on or as soon as practicable after the change of
control payment date.
The provisions described above that require the Company to
make a change of control offer (as defined herein) following a change of control
(as defined herein) will be applicable regardless of whether any other
provisions of this Certificate of Designations are applicable.
The Company will not be required to make a change of control
offer upon a change of control if a third party makes the change of control
offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Certificate of Designations applicable to a
change of control offer made by the Company and purchases all Convertible
Preferred Stock validly tendered and not withdrawn under such change of control
offer.
The provisions under this Certificate of Designations relating
to the Company's obligation to make an offer to repurchase the Convertible
Preferred Stock as a result of a change of control may be waived or modified
with the written consent of the holders of 662/3% of the Convertible Preferred
Stock.
A "change of control" means:
- - a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act (other than the Hale Family; provided,
however, that the Hale Family may not engage in such a transaction that
would result in the Company no longer being subject to the periodic
reporting requirements under the Exchange
<PAGE> 9
9
Act without such transaction being deemed a change of control) becomes
the ultimate "beneficial owner" (as defined in Rule 13-d under the
Exchange Act without such transaction being deemed a change of control)
of more than 50% of the total voting power of the Company's "voting
stock" on a fully diluted basis; or
- - Individuals who on the effective date of the Certificate of
Designations constitute the Board of Directors (together with any new
directors whose election by the Board of Directors or whose nomination
for election by stockholders was approved by a vote of at least 662/3%
of the members of the Board of Directors then in office who either were
members of the Board of Directors on the closing date or whose election
or nomination for election was previously so approved) cease for any
reason to constitute a majority of the members of the Board of
Directors then in office.
There shall be no change of control if either the closing
price of the Common Stock exceeds 105% of the effective conversion rate at the
time of the announcement of the change of control or all of the consideration
received by the holders of Common Stock in a transaction that gives rise to the
change of control is publicly-traded common stock.
(f) Voting Rights. (A) The holders of Convertible Preferred
Stock, except as otherwise required under Delaware law or as set forth in
paragraphs (B) and (C) below, shall not be entitled to vote on any matter
required or permitted to be voted upon by the stockholders of the Company.
(B) (1) If dividends on the Convertible Preferred Stock are in
arrears and unpaid for six or more Dividend Periods, whether or not
consecutive, together with any event with a similar effect pursuant to
the terms of any series of preferred stock upon which like rights have
been conferred, which is referred to as a "Voting Rights Triggering
Event", then the number of directors constituting the Board of
Directors will, subject to paragraph (f)(B)(5), be increased by two
directors, unless previously increased pursuant to the terms of any
other series of preferred stock upon which like rights have been
conferred, and the Holders of the then outstanding shares of
Convertible Preferred Stock (together with the holders of parity
securities upon which like rights have been conferred and are
exercisable), voting separately and as a class, shall have the right
and power to elect to serve on the Board of Directors such two
additional members to the Board of Directors, unless previously
increased pursuant to the terms of any other series of preferred stock
upon which like rights have been conferred.
(2) The voting rights set forth in paragraph (f)(B)(1) above
will continue until such time as all dividends in arrears on the
Convertible Preferred Stock are paid in full, at which time the term of
any directors elected pursuant to the provisions of paragraph (f)(B)(1)
above (subject to the right of holders of any other Preferred Stock to
elect directors pursuant to the terms of the instruments governing such
Preferred Stock) shall terminate forthwith and the number of directors
constituting the Board of Directors shall be decreased by such number
(until the occurrence of any subsequent Voting Rights Triggering
Event). The right to elect directors upon a Voting Rights Triggering
Event will expire when the number of shares of Convertible Preferred
Stock outstanding is reduced to 83,333 or less.
<PAGE> 10
10
At any time after voting power to elect directors shall have
become vested and be continuing in the holders of Convertible Preferred
Stock (together with the holders of parity securities upon which like
rights have been conferred and are exercisable) pursuant to paragraph
(f)(B)(1) hereof, or if vacancies shall exist in the offices of
directors elected by such holders, a proper officer of the Company may,
and upon the written request of the holders of record of at least 25%
of the shares of Convertible Preferred Stock then outstanding or the
holders of 25% of the shares of parity securities then outstanding upon
which like rights have been confirmed and are exercisable addressed to
the secretary of the Company shall, call a special meeting of the
Holders of Convertible Preferred Stock and the holders of such parity
securities for the purpose of electing the directors which such holders
are entitled to elect pursuant to the terms hereof; provided, however,
that no such special meeting shall be called if the next annual meeting
of stockholders of the Company is to be held within 60 days after the
voting power to elect directors shall have become vested, in which case
such meeting shall be deemed to have been called for such next annual
meeting. If such meeting shall not be called by a proper officer of the
Company within 20 days after personal service to the secretary of the
Company at its principal executive offices, then the Holders of record
of at least 25% of the outstanding shares of Convertible Preferred
Stock or the holders of 25% of the shares of parity securities upon
which like rights have been confirmed and are exercisable may designate
in writing one of their members to call such meeting at the expense of
the Company, and such meeting may be called by the person so designated
upon the notice required for the annual meetings of stockholders of the
Company and shall be held at the place for holding the annual meetings
of stockholders. Any holder of Convertible Preferred Stock or such
parity securities so designated shall have, and the Company shall
provide, access to the lists of holders of Convertible Preferred Stock
and the holders of such parity securities to be called pursuant to the
provisions hereof. If no special meeting of the Holders of Convertible
Preferred Stock and the holders of such parity securities is called as
provided in this paragraph (f)(B), then such meeting shall be deemed to
have been called for the next annual meeting of stockholders of the
Company or special meeting of the holders of any other Capital Stock of
the Company.
(3) At any meeting held for the purposes of electing directors
at which the Holders of Convertible Preferred Stock (together with the
holders of parity securities upon which like rights have been conferred
and are exercisable) shall have the right, voting together as a
separate class, to elect directors as aforesaid, the presence in person
or by proxy of the holders of at least a majority in voting power of
the outstanding shares of Convertible Preferred Stock (and such parity
securities) shall be required to constitute a quorum thereof.
(4) Any vacancy occurring in the office of a director elected
by the Holders of Convertible Preferred Stock (and such parity
securities) may be filled by the remaining director elected by the
Holders of Convertible Preferred Stock (and such parity securities)
unless and until such vacancy shall be filled by the Holders of
Convertible Preferred Stock (and such parity securities).
(5) If an event occurs at any time that results in the holders
of any parity securities having voting rights to elect directors to the
Board of Directors, then holders of Convertible Preferred Stock shall,
whether or not such event otherwise
<PAGE> 11
11
constitutes a Voting Rights Triggering Event pursuant to paragraph
(f)(B)(1), have the voting rights set forth in paragraphs (f)(B)(1) and
(f)(B)(2), and such event shall be deemed (for purposes of this
paragraph (f) only) to constitute a Voting Rights Triggering Event. In
addition, in the event that during a time in which directors elected by
the holders of Convertible Preferred Stock pursuant to this paragraph
(f)(B) are serving on the Board of Directors ("Previously-Elected
Directors") an event occurs that results in holders of parity
securities having voting rights to elect (voting together with the
Holders of Convertible Preferred Stock) at least two directors to the
Board of Directors, the Holders of Convertible Preferred Stock shall
vote together with the holders of such parity securities to elect such
new directors, and upon the election of the new directors the
Previously-Elected Directors shall (unless such Previously-Elected
Directors are elected as new directors) cease to serve on the Board of
Directors.
(C) (1) So long as any shares of the Convertible Preferred
Stock are outstanding, the Company will not authorize, create or
increase the authorized amount of any class or series of senior
securities without the affirmative vote or consent of Holders of at
least 662/3% of the shares of Convertible Preferred Stock then
outstanding, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting. However, without the consent of any
Holder of Convertible Preferred Stock, the Company may create
additional classes of stock, increase the authorized number of shares
of Convertible Preferred Stock or issue a series of parity securities
or junior securities.
(2) The Company may amend this Certificate of Designations
with the consent of the Holders of a majority of the Convertible
Preferred Stock then outstanding, including votes or consents obtained
in connection with a tender offer or exchange offer for Convertible
Preferred Stock, and, except as otherwise provided by applicable law,
any past default or failure to comply with any provision of this
Certificate of Designations may also be waived with the consent of such
Holders. Notwithstanding the foregoing, however, without the consent of
each Holder affected, an amendment or waiver may not (with respect to
any shares of the Convertible Preferred Stock held by a non-consenting
Holder) (a) alter the voting rights with respect to the Convertible
Preferred Stock or reduce the number of shares of the Convertible
Preferred Stock the Holders of which must consent to an amendment,
supplement or waiver, (b) reduce the Liquidation Preference of any
share of the Convertible Preferred Stock or adversely alter the
provisions with respect to the redemption of Convertible Preferred
Stock, (c) reduce the rate of or change the time for payment of
dividends on any share of the Convertible Preferred Stock, (d) waive a
default in the payment of dividends or liquidated damages, if any, on
the Convertible Preferred Stock, (e) make any share of the Convertible
Preferred Stock payable in money other than United States dollars, (f)
make any change in the provisions of the Certificate of Designations
relating to waivers of the rights of holders of the Convertible
Preferred Stock to receive the liquidation, (g) preference, dividends
or liquidated damages, if any, on the Convertible Preferred Stock, or
(h) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any
Holder of the Convertible Preferred Stock, the Company may, to the
extent permitted by
<PAGE> 12
12
Delaware law, amend or supplement the Certificate of Designations to
cure any ambiguity, defect or inconsistency, to provide for
uncertificated shares of the Convertible Preferred Stock in addition to
or in place of certificated shares of the Convertible Preferred Stock
or to make any change that would provide any additional rights or
benefits to the Holders of the Convertible Preferred Stock or to make
any change that the Board of Directors determines, in good faith, is
not materially adverse to Holders of the Convertible Preferred Stock.
(3) Except as set forth in paragraph (f)(C)(1) or (2) above,
(x) the creation, authorization or issuance of any shares of any junior
securities or parity securities, including the designation of a series
of Convertible Preferred Stock, or (y) the increase or decrease in the
amount of authorized Capital Stock of any class, including Preferred
Stock, shall not require the consent of Holders of Convertible
Preferred Stock and shall not be deemed to affect adversely the rights,
preferences, privileges or voting rights of shares of Convertible
Preferred Stock.
(D) In any case in which the Holders of Convertible Preferred
Stock shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Delaware law, each Holder of Convertible Preferred Stock entitled to vote with
respect to such matters shall be entitled to one vote for each share of
Convertible Preferred Stock held.
(E) Except as required by law, the Holders of the Convertible
Preferred Stock will not be entitled to vote on any merger or consolidation
involving the Company or a sale of all or substantially all the assets of the
Company.
(g) Conversion. The Convertible Preferred Stock will be convertible, at
the option of the Holder and unless previously redeemed or repurchased, into the
number of shares of Common Stock issuable upon conversion of one share of
Convertible Preferred Stock, which will be determined by dividing the
Liquidation Preference, plus all accrued and unpaid dividends thereon to the
date of conversion, of such share of Convertible Preferred Stock as of such date
by the Conversion Price (as defined herein) then in effect, which is referred to
as the "conversion rate", subject to the adjustments described below. The right
to convert a share of the Convertible Preferred Stock called for redemption or
delivered for repurchase will terminate at the close of business on the
redemption date, as defined below, for such Convertible Preferred Stock or at
the time of repurchase, as the case may be.
(3) The price at which Common Stock shall be delivered upon
conversion, herein called the "Conversion Price", shall be initially $[ ] per
share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraph (g)(D) and paragraph (g)(E).
(B) In order to exercise the conversion privilege provided for
in paragraph (g)(A)(1), the Holder of any share of Convertible Preferred Stock
to be converted shall surrender the certificate for such share of Convertible
Preferred Stock, duly endorsed or assigned to the Company or in blank, at the
office of the Transfer Agent or at any office or agency of the Company
maintained for that purpose, accompanied by written notice to the Company in the
form of Exhibit B that the Holder elects to convert such share of Convertible
Preferred Stock or, if fewer than all the shares of Convertible Preferred Stock
represented by a single share certificate are to be converted, the number of
shares represented thereby to be converted. Such notice shall also contain the
office or the
<PAGE> 13
13
address to which the Company should deliver shares of Common Stock issuable upon
conversion (and any other payments or certificates related thereto). Upon any
conversion of Convertible Preferred Stock pursuant to paragraph (g)(A)(2), the
Company will promptly notify the Holders thereof and will deliver shares of
Common Stock issuable upon such conversion to the office or address specified by
such Holders.
Holders of shares of Convertible Preferred Stock at the close
of business on a record date will be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
conversion of such shares following such record date and prior to such Dividend
Payment Date. Shares of Convertible Preferred Stock surrendered for conversion
during the period between the close of business on any record date and the
opening of business on the corresponding Dividend Payment Date (except shares
converted after the issuance of a notice of redemption with respect to a
redemption date during such period, which will be entitled to such dividend)
must be accompanied by payment of an amount equal to the dividend payable on
such shares on such Dividend Payment Date. A holder of shares of Convertible
Preferred Stock on a record date who (or whose transferee) tenders any such
shares for conversion into shares of Common Stock on or prior to such Dividend
Payment Date (or where shares of Convertible Preferred Stock are automatically
converted during such period) will receive the dividend payable by the Company
on such shares of Convertible Preferred Stock on such date, and the converting
holder need not include payment of the amount of such dividend upon surrender of
shares of Convertible Preferred Stock for conversion. Except as provided above,
the Company will make no payment or allowance for unpaid dividends, whether or
not in arrears, on converted shares or the dividends on the shares of Common
Stock issued upon such conversion.
Shares of Convertible Preferred Stock shall be deemed to have
been converted immediately prior to the close of business on the day (x) of
surrender of such shares of Convertible Preferred Stock for conversion in
accordance with the foregoing provisions or (y) in the case of an automatic
conversion, the Transfer Agent receives the appropriate notice from the Company,
and at such time the rights of the Holders of such shares of Convertible
Preferred Stock as Holders shall cease, and the person or persons entitled to
receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall issue
and shall deliver to such office or agency as the converting Holder shall have
designated in its written notice to the Company a certificate or certificates
for the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share, as provided in paragraph (g)(C)
hereof.
In the case of any conversion of fewer than all the shares of
Convertible Preferred Stock evidenced by a certificate, upon such conversion the
Company shall execute and the Transfer Agent shall authenticate and deliver to
the Holder thereof (at the address designated by such Holder), at the expense of
the Company, a new certificate or certificates representing the number of
unconverted shares of Convertible Preferred Stock.
(C) No fractional shares of Common Stock shall be issued upon
the conversion of a share of Convertible Preferred Stock. If more than one share
of Convertible Preferred Stock shall be surrendered for conversion at one time
by the same holder, the number of full shares of Common Stock which shall be
issuable upon
<PAGE> 14
14
conversion thereof shall be computed on the basis of the aggregate shares of
Convertible Preferred Stock so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any share of
Convertible Preferred Stock, the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the closing price
(as defined in paragraph (g)(D)(7)) per share of Common Stock at the close of
business on the Business Day prior to the day of conversion.
(D) The Conversion Price shall be adjusted from time to time
by the Company as follows:
(1) If the Company shall hereafter pay a dividend or make a
distribution in Common Stock to all holders of any outstanding class or
series of Common Stock, the Conversion Price in effect at the opening
of business on the date following the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date (as defined in
paragraph (g)(D)(7)) fixed for such determination and the denominator
shall be the sum of such number of outstanding shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business
on the day following the Record Date. If any dividend or distribution
of the type described in this paragraph (g)(D)(1) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared.
(2) If the Company shall offer or issue rights or warrants to
all holders of its outstanding Common Stock entitling them to subscribe
for or purchase Common Stock at a price per share less than the Current
Market Price (as defined in paragraph (g)(D)(7)) on the Record Date
fixed for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion
Price in effect at the opening of business on the date after such
Record Date by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
Record Date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock
subject to such rights or warrants would purchase at such Current
Market Price and of which the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the Record Date
plus the total number of additional shares of Common Stock subject to
such rights or warrants for subscription or purchase. Such adjustment
shall become effective immediately after the opening of business on the
day following the Record Date fixed for determination of stockholders
entitled to purchase or receive such rights or warrants. To the extent
that shares of Common Stock are not delivered pursuant to such rights
or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued, the Conversion
Price shall
<PAGE> 15
15
again be adjusted to be the Conversion Price which would then be in
effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase Common Stock at less than such Current Market
Price, and in determining the aggregate offering price of such shares
of Common Stock, there shall be taken into account any consideration
received for such rights or warrants, with the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(3) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, if the outstanding shares
of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business
on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) If the Company shall, by dividend or otherwise, distribute
to all holders of its shares of Common Stock shares of any class of
Capital Stock of the Company (other than any dividends or distributions
to which paragraph (g)(D)(1) applies) or evidences of its indebtedness,
cash or other assets (including securities, but excluding any rights or
warrants of a type referred to in paragraph (g)(D)(2) and excluding
dividends and distributions paid exclusively in cash and excluding any
Capital Stock, evidences of indebtedness, cash or assets distributed
upon a merger or consolidation to which paragraph (g)(E) applies) (the
foregoing hereinafter in this paragraph (g)(D)(4) called the
"Distributed Securities"), then, in each such case, the Conversion
Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the Record Date (as defined in
paragraph (g)(D)(7)) with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price (determined as
provided in paragraph (g)(D)(7)) of the Common Stock on such date less
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock and
the denominator shall be such Current Market Price, such reduction to
become effective immediately prior to the opening of business on the
day following the Record Date. If such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of
this paragraph (g)(D)(4) by reference to the actual or when issued
trading market for any securities comprising all or part of such
distribution, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price
pursuant to paragraph (g)(D)(7) to the extent possible.
<PAGE> 16
16
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's Capital Stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Dilution Trigger Event"): (i) are deemed to
be transferred with such Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of Common Stock,
shall be deemed not to have been distributed for purposes of this
paragraph (g)(D)(4) (and no adjustment to the Conversion Price under
this paragraph (g)(D)(4) shall be required) until the occurrence of the
earliest Dilution Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment
to the Conversion Price under this paragraph (g)(D)(4) shall be made;
provided, however, that no such adjustment shall be made unless the
rights or warrants issued are exercisable for shares of Common Stock or
other securities with an exercise price per share less than the Current
Market Price. If any such rights or warrants, including any such
existing rights or warrants distributed prior to the date hereof, are
subject to subsequent events, upon the occurrence of each of which such
rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be such date of
issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any
Dilution Trigger Event with respect thereto, that was counted for
purposes of calculating a distribution amount for which an adjustment
to the Conversion Price under this paragraph (g)(D)(4) was made, (1) in
the case of any such rights or warrants which shall all have been
redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Dilution Trigger
Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or
holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants which shall
have expired or been terminated without exercise by any holders
thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
Notwithstanding any other provision of this paragraph (g)(D)(4) to the
contrary, Capital Stock, rights, warrants, evidences of indebtedness,
other securities, cash or other assets (including any rights
distributed pursuant to any shareholder rights plan) shall be deemed
not to have been distributed for purposes of this paragraph (g)(D)(4)
if the Company makes proper provision so that each holder of shares of
Convertible Preferred Stock who converts a share of Convertible
Preferred Stock (or any portion thereof) after the date fixed for
determination of stockholders entitled to receive such distribution
shall be entitled to receive upon such conversion, in addition to the
Common Stock issuable upon such conversion, the amount and kind of such
distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date,
converted such share of Convertible Preferred Stock into Common Stock.
<PAGE> 17
17
For purposes of this paragraph (g)(D)(4) and paragraphs (g)(D)(1) and
(2), any dividend or distribution to which this paragraph (g)(D)(4) is
applicable that also includes Common Stock, or rights or warrants to
subscribe for or purchase Common Stock to which paragraph (g)(D)(2)
applies (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, cash, assets, shares of
Capital Stock, rights or warrants other than (A) such shares of Common
Stock or (B) rights or warrants to which paragraph (g)(D)(2) applies
(and any Conversion Price reduction required by this paragraph
(g)(D)(4) with respect to such dividend or distribution shall then be
made) immediately followed by (2) a dividend or distribution of such
Common Stock or such rights or warrants (and any further Conversion
Price reduction required by paragraph (g)(D)(1) and (2) with respect to
such dividend or distribution shall then be made), except that (x) the
Record Date of such dividend or distribution shall be substituted as
"the Record Date fixed for the determination of stockholders entitled
to receive such dividend or other distribution", "Record Date fixed for
such determination" and "Record Date" within the meaning of paragraph
(g)(D)(1) and as "the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants", "the date
fixed for the determination of the stockholders entitled to receive
such rights or warrants" and "such Record Date" within the meaning of
paragraph (g)(D)(2), and (y) any share of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close
of business on the date fixed for such determination" within the
meaning of paragraph (g)(D)(1).
(5) If the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which paragraph (g)(E)
applies or as part of a distribution referred to in paragraph
(g)(D)(4)) in an aggregate amount that, combined together with (1) the
aggregate amount of any other such distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution, and in respect of which no
adjustment pursuant to this paragraph (g)(D)(5) has been made, and (2)
the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of consideration
payable in respect of any tender offer by the Company or a Subsidiary
of the Company for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to
paragraph (g)(D)(4) has been made, exceeds the greater of (x) 10% of
the product of the Current Market Price (determined as provided in
paragraph (g)(D)(7)) on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on
such date or (y) the amount paid on shares of Common Stock within the
preceding 12-month period, to the extent such payments did not require
an adjustment to the conversion rate, then, and in each such case,
immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction (i)
the numerator of which shall be equal to the Current Market Price on
the Record Date less an amount equal to the quotient of (x) the excess
of such combined amount over the greater of (1) such 10% amount or (2)
the amount paid on Common Stock within the preceding
<PAGE> 18
18
12-month period divided by (y) the number of shares of Common Stock
outstanding on the Record Date and (ii) the denominator of which shall
be equal to the Current Market Price on such Record Date; provided,
however, that, if the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
holder of Convertible Preferred Stock shall have the right to receive
upon conversion of a share of Convertible Preferred Stock (or any
portion thereof) the amount of cash such holder would have received had
such holder converted such share of Convertible Preferred Stock (or
portion thereof) immediately prior to such Record Date. If such
dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such dividend or distribution had not been declared.
(6) If a tender or exchange offer made by the Company or any
of its Subsidiaries for all or any portion of the Common Stock expires
and such tender or exchange offer (as amended upon the expiration
thereof) requires the payment to stockholders (based on the acceptance
(up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors) that, combined together with (i) the
aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors), as of the
expiration of such tender offer, of consideration payable in respect of
any other tender offers by the Company or any of its Subsidiaries for
all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to this paragraph (g)(D)(6) has been made and
(ii) the aggregate amount of any distributions to all holders of the
Common Stock made exclusively in cash within 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to paragraph (g)(D)(5) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in
paragraph (g)(D)(7)) as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender offer (as it may
be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
close of business on the date of the Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the number which equals (1) the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares")
divided by (2) 10% of the Current
<PAGE> 19
19
Market Price (as determined in paragraph (g)(D)(7)) as of the
Expiration Time times the number of shares of Common Stock outstanding
(including any tendered shares) at the Expiration Time and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration
Time, such reduction (if any) to become effective immediately prior to
the opening of business on the day following the Expiration Time. If
the Company is obligated to purchase shares pursuant to any such tender
offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such tender offer had not been made.
If the application of this paragraph (g)(D)(6) to any tender offer
would result in an increase in the Conversion Price, no adjustment
shall be made for such tender offer under this paragraph (g)(D)(6).
(7) For purposes of this paragraph (g), the following terms
shall have the meaning indicated:
"closing price" with respect to any securities on any day means the
last sale price on such day or, if no such sale takes place on such
day, the average of the reported high bid and low ask prices on such
day, in each case on the NNM or the New York Stock Exchange, as
applicable, or, if such security is not listed or admitted to trading
on such national market or exchange, on the principal national
securities exchange or quotation system on which such security is
quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation
system, the average of the high bid and low ask prices of such security
on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated or a similar generally
accepted reporting service, or, if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors.
"Current Market Price" means the average over the 10 trading days
ending on the date immediately preceding the date of such determination
of the last reported sale price, or, if no such sale takes place on any
such day, the closing bid price, in either case as reported for
consolidated transactions on the principal national securities exchange
(including the NNM) on which the Common Stock is listed or admitted for
trading; provided, however, that if any event (other than a change of
control) that results in an adjustment of the conversion rate occurs
during the period beginning on the first day of such 10-day period and
ending on the date immediately preceding the date of determination, the
Current Market Price as determined pursuant to the foregoing will be
appropriately adjusted as necessary to reflect the occurrence of such
event.
"fair market value" shall mean the amount which a willing buyer would
pay a willing seller in an arm's-length transaction.
"Record Date" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have
the right to
<PAGE> 20
20
receive any cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed
for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
(8) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which
by reason of this paragraph (g)(D)(8) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment.
All calculations under this paragraph (g)(D) shall be made by the
Company and shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. No adjustment need be
made for a change in the par value or no par value of the Common Stock.
(9) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Transfer Agent an
Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring
such adjustment. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of Convertible
Preferred Stock at such holder's last address appearing on the register
of holders maintained for that purpose within 20 days of the effective
date of such adjustment. Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.
(10) In any case in which this paragraph (g)(D) provides that
an adjustment shall become effective immediately after a Record Date
for an event, the Company may defer until the occurrence of such event
issuing to the holder of any share of Convertible Preferred Stock
converted after such Record Date and before the occurrence of such
event the additional Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment.
(11) For purposes of this paragraph (g)(D), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of Common
Stock. The Company shall not pay any dividend or make any distribution
on Common Stock held in the treasury of the Company.
(E) In case of any consolidation of the Company with, or
merger of the Company into, any other corporation, or in case of any
merger of another corporation into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company), or
in case of any conveyance or transfer of the properties and assets of
the Company substantially as an entirety, the holder of each share of
Convertible Preferred Stock then outstanding shall have the right
<PAGE> 21
21
thereafter, during the period such Convertible Preferred Stock shall be
convertible as specified in paragraph (g)(A), to convert such share of
Convertible Preferred Stock only (subject to paragraph (e)(ii)(F) in
the case of a Common Stock Change in Control) into the kind and amount
of securities, cash and other property receivable upon such
consolidation, merger, conveyance or transfer by a holder of the number
of shares of Common Stock of the Company into which such share of
Convertible Preferred Stock might have been converted immediately prior
to such consolidation, merger, conveyance or transfer, assuming such
holder of Common Stock of the Company failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance
or transfer (provided that, if the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
conveyance or transfer is not the same for each share of Common Stock
of the Company in respect of which such rights of election shall not
have been exercised ("nonelecting share"), then for the purpose of this
paragraph (g)(E) the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance or
transfer by each nonelecting share of Common Stock shall be deemed to
be the kind and amount so receivable per share by a plurality of the
nonelecting shares). In the event that the consideration received in
such consolidation, merger, conveyance or transfer is securities, and
such securities received are convertible or exchangeable, such
securities shall provide for adjustments which, for events subsequent
to the effective date of the triggering event, shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this paragraph (g)(E). The above provisions of this Section shall
similarly apply to successive consolidations, mergers, conveyances or
transfers.
(F) In case:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out of its
earned surplus; or
(2) the Company shall authorize the granting to all holders of
its Common Stock of rights or warrants to subscribe for or purchase any shares
of Capital Stock of any class or of any other rights; or
(3) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock), or of
any consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or the sale or transfer
of all or substantially all the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed with the Transfer Agent and at each
office or agency maintained for the purpose of conversion of the Convertible
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the Convertible Preferred Stock Register, at
least 20 days (or 10 days in any case specified in clause (1) or (2) above)
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
<PAGE> 22
22
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give the notice requested by
this Section or any defect therein shall not affect the legality or validity of
any dividend, distribution, right, warrant, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up, or the vote upon
any such action.
(G) The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued shares
of Common Stock (or out of its authorized shares of Common Stock held
in the treasury of the Company), for the purpose of effecting the
conversion of the Convertible Preferred Stock, the full number of
shares of Common Stock then issuable upon the conversion of all
outstanding shares of Convertible Preferred Stock.
(H) The Company will pay any and all document, stamp or
similar issue or transfer taxes that may be payable in respect of the
issue or delivery of Common Stock on conversion of the Convertible
Preferred Stock pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name
other than that of the holder of the share of Convertible Preferred
Stock or the shares of Convertible Preferred Stock to be converted, and
no such issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Company the amount of any such
tax, or has established to the satisfaction of the Company that such
tax has been paid.
(I) Reserved.
(J) If, as a result of the operation of this paragraph (g),
the cumulative number of shares of Common Stock issued or issuable upon
conversion of the Convertible Preferred Stock, after giving effect to the
adjustments described in this paragraph (g) and all prior conversions of
Convertible Preferred Stock, would exceed a number (the "Threshold Number")
equal to [19.99]% of the outstanding shares of Common Stock as of the Issue
Date, then until and unless the Company obtains the approval of its Common
Stockholders for the issuance of any shares of Common Stock in excess of the
Threshold Number, the Conversion Price shall be adjusted pursuant to this
paragraph (g) to that price that would entitle the holders of Convertible
Preferred Stock to receive in the aggregate, upon conversion of all the
Convertible Preferred Stock (including all prior conversions of Convertible
Preferred Stock), no more than the Threshold Number of shares of Common Stock.
If, as a result of the operation of the preceding sentence, the adjustments
required by operation of paragraph (g) in the Conversion Price is limited
because appropriate stockholder approval has not been obtained, the Company
agrees for the benefit of the Holders of Convertible Preferred Stock to seek, as
promptly as reasonably practicable, the requisite approval of its Common
Stockholders for the full adjustment of the Conversion Price as required by
operation of paragraph (g) (without giving effect to the preceding sentence) and
the
<PAGE> 23
23
Company shall not be required to issue securities in excess of the Threshold
Number until such stockholder approval is obtained.
(h) Reissuance of Convertible Preferred Stock. Shares of Convertible
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased, redeemed, converted or exchanged, shall not be reissued as
shares of Convertible Preferred Stock and shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized and
unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock; provided,
however, that so long as any shares of Convertible Preferred Stock are
outstanding, any issuance of such shares must be in compliance with the terms
hereof. Upon any such reacquisitions, the number of shares of Convertible
Preferred Stock authorized pursuant to this Certificate of Designations shall be
reduced by the number of shares so reacquired.
(i) Business Day. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately succeeding
Business Day.
(j) Limitation on Mergers and Asset Sales. The Company may not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any person unless: (1) the successor,
transferee or lessee (if not the Company) is organized and existing under the
laws of the United States of America or any State thereof or the District of
Columbia and the Convertible Preferred Stock shall be converted into or
exchanged for and shall become shares of such successor, transferee or lessee,
having in respect of such successor, transferee or lessee substantially the same
powers, preference and relative participating, optional or other special rights
and the qualifications, limitations or restrictions thereon, that the
Convertible Preferred Stock had immediately prior to such transaction; and (2)
the Company delivers to the Transfer Agent an Officers' Certificate and an
Opinion of Counsel stating that such consolidation, merger or transfer does not
conflict with the Certificate of Designations. The successor, transferee or
lessee will be the successor company.
(k) Reserved.
(l) Reports. So long as any shares of the Convertible Preferred Stock
are outstanding, the Company will furnish to the holders of the Convertible
Preferred Stock
- all quarterly and annual financial information that
would be required to be contained in a fling with the
SEC on Forms 10-Q and 10-K and, with respect to the
annual information only, a report thereon by our
certified independent accountants, and
- all information that would be required to be
contained in a current report on Form 8-K.
In the event we have filed any of these reports with the SEC,
we will only furnish the report to holders who request a copy of the report.
Unless prohibited by the SEC, we will make our reports publicly available.
<PAGE> 24
24
(m) Payment for Consents. The Company may not pay, whether by way of
dividend or other distribution, fee or otherwise, to any holder of shares of the
Convertible Preferred Stock (and the corresponding depositary shares) for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Certificate of Designations or the Convertible Preferred Stock
unless such consideration is offered to be paid and is paid to all Convertible
Preferred Stock that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
(n) Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, without the affirmative vote or consent of
the holders of a majority of the outstanding shares of Convertible Preferred
Stock, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any affiliate, unless
- the transaction is on terms that no less favorable to
us than those that would have been obtained in a
comparable transaction with an unrelated third party,
and
- the transaction has been approved by a majority of
the members of the board of directors that are
disinterested with the transaction.
The provisions of the foregoing paragraph shall not prohibit:
- any issuance of securities, or other payments,
pursuant to employment arrangements and stock plans,
- the grant of stock options or similar rights to any
employees and directors under our stock plans,
- any employment or consulting agreement,
- the payment of reasonable fees to our directors who
are not our employees,
- any transaction with one of our Subsidiaries, or
- the grant of registration rights with respect to
securities of the Company.
The provisions of the foregoing paragraph shall also not apply to any affiliate
transaction publicly disclosed prior to [ ], 2000 in a filing by the Company
with the SEC or in the prospectus dated [ ], 2000.
(o) Certain Definitions. As used in this Certificate of Designations,
the following terms shall have the following meanings (and (1) terms defined in
the singular have comparable meanings when used in the plural and vice versa,
(2) "including" means including without limitation, (3) "or" is not exclusive
and (4) an accounting term not otherwise defined has the meaning assigned to it
in accordance with United States generally accepted accounting principles as in
effect on the Issue Date and all accounting
<PAGE> 25
25
calculations will be determined in accordance with such principles), unless the
content otherwise requires:
"affiliate" means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For purposes of this
definition, "control", including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with", as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, whether through the ownership of voting securities, by agreement or
otherwise; provided that beneficial ownership of 10% or more of the voting
securities of a person shall be deemed to be control.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the Issue Date, including all Common Stock and Preferred Stock.
"Common Stock" means the Company's common stock, par value
$0.01 per share.
"Continuing Directors" means, as of any date of determination,
individuals who on the Issue Date constituted the Board of Directors (together
with any new directors whose election by the Board of Directors or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the members of the Board of Directors then in office who
either were members of the Board of Directors on the Issue Date or whose
election or nomination for election was previously so approved).
"Dividend Period" means each period between two consecutive
Dividend Payment Dates and the period from the Issue Date to the first Dividend
Payment Date.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Credit Facility" means the 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, as amended from time to time.
"Hale Family" means collectively Robert T. Hale, Robert T.
Hale, Jr. and members of their immediate families, any of their respective
spouses, estates, lineal descendants, heirs, executors, personal
representatives, administrators, trusts for any of their benefit and charitable
foundations to which shares of the Company's Capital Stock beneficially owned by
any of the foregoing have been transferred.
<PAGE> 26
26
"Holders" means the registered holders from time to time of
the Convertible Preferred Stock.
"Issue Date" means the date on which the Convertible Preferred
Stock is initially issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.
"NNM" means The Nasdaq National Market.
"Officer" means the Chairman of the Board of Directors, the
President, any Vice President, the Treasurer, the Secretary or any Assistant
Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Transfer Agent. The counsel may be an employee
of or counsel to the Company or the Transfer Agent.
"person" or "Person" means any individual, corporation,
partnership, joint venture, limited liability company, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the Issue Date, including all series and
classes of such preferred or preference stock.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933.
"Senior Secured Credit Facilities" means the Company's
proposed senior secured credit facility to be provided and syndicated by Goldman
Sachs Credit Partners L.P. which is described in the Company Registration
Statement on Form S-3 filed with the U.S. Securities and Exchange Commission
(File No. 333-32040), as in effect from time to time.
"Subsidiary" means with respect to any Person any corporation,
association or other business entity of which Voting Stock representing more
than 50% of the voting power of shares of outstanding Voting Stock is owned,
directly or indirectly, by such Person, or one or more other Subsidiaries of
such Person.
"Transfer Agent" means the Transfer Agent for the Convertible
Preferred Stock appointed by the Company, which initially shall be American
Stock Transfer & Trust Company.
<PAGE> 27
27
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
<PAGE> 28
28
IN WITNESS WHEREOF, said Network Plus Corp., has caused this
Certificate of Designations to be signed by [ ], its [ ], this [ ] day of [ ],
2000.
NETWORK PLUS CORP.,
by_______________________________
Name:
Title:
<PAGE> 29
EXHIBIT B
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Convertible Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion") shares
of [ ]% Series A Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"), represented by stock certificate No(s). (the
"Convertible Preferred Stock Certificates") into shares of common stock ("Common
Stock") of Network Plus Corp. (the "Company") according to the conditions of the
Certificate of Designations, Preferences and Rights of the Convertible Preferred
Stock (the "Certificate of Designations"), as of the date written below. If
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates. No fee will be charged to the holder for
any conversion, except for transfer taxes, if any. A copy of each Convertible
Preferred Stock Certificate is attached hereto (or evidence of loss, theft or
destruction thereof).
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Convertible Preferred Stock shall be made pursuant to
registration of the Common Stock under the Securities Act of 1933 (the "Act"),
or pursuant to any exemption from registration under the Act.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designations.
Date of Conversion:__________________________________
Applicable Conversion Price:_________________________
Number of shares of Convertible
Preferred Stock to be Converted:_____________________
Number of shares of
Common Stock to be Issued:___________________________
Signature:___________________________________________
Name:________________________________________________
Address:**___________________________________________
Fax No.:_____________________________________________
*The Company is not required to issue shares of Common Stock until the original
Convertible Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its Transfer
Agent. The Company shall issue and deliver shares of Common Stock to an
overnight courier not
<PAGE> 30
2
later than three business days following receipt of the original Convertible
Preferred Stock Certificate(s) to be converted.
**Address where shares of Common Stock and any other payments or certificates
shall be sent by the Company.
<PAGE> 1
Exhibit 4.4
DEPOSIT AGREEMENT
Among
NETWORK PLUS CORP.,
AMERICAN STOCK TRANSFER & TRUST COMPANY, as Depositary,
and
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
Dated as of April [6], 2000
<PAGE> 2
<TABLE>
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TABLE OF CONTENTS
-----------------
ARTICLE I
Definitions
ARTICLE II
Form of Receipts, Deposit of Convertible Preferred Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
<S> <C> <C>
SECTION 2.01. Form and Transferability of Receipts................................................ 3
SECTION 2.02. Deposit of Convertible Preferred Stock; Execution and Delivery of Receipts in
Respect Thereof.......................................................... 4
SECTION 2.03. Conversion at the Option of Holders................................................. 6
SECTION 2.04. Redemption of Convertible Preferred Stock........................................... 8
SECTION 2.05. Registration of Transfer of Receipts................................................ 10
SECTION 2.06. Split-ups and Combinations of Receipts; Surrender of Receipts and Withdrawal
of Convertible Preferred Stock......................................... 11
SECTION 2.07. Limitations on Execution and Delivery, Transfer, Surrender and Exchange of
Receipts............................................................... 12
SECTION 2.08. Lost Receipts, etc.................................................................. 13
SECTION 2.09. Cancellation and Destruction of
Surrendered Receipts................................................... 13
SECTION 2.10. Lost Depositary Share Certificates, etc............................................. 13
</TABLE>
ARTICLE III
Certain Obligations of Holders
of Receipts and the Company
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 3.01. Filing Proofs, Certificates and Other Information................................... 13
SECTION 3.02. Payment of Taxes or Other Governmental Charges...................................... 14
SECTION 3.03. Warranty as to Convertible Preferred Stock.......................................... 14
</TABLE>
i
<PAGE> 3
<TABLE>
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ARTICLE IV
The Deposited Securities; Notices
<S> <C> <C>
SECTION 4.01. Cash Distributions.................................................................. 15
SECTION 4.02. Distribution Other than Cash, Rights, Preferences or Privileges..................... 15
SECTION 4.03. Subscription Rights, Preferences or Privileges...................................... 16
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for Holders of Receipts............ 17
SECTION 4.05. Notice of Change of Control......................................................... 18
SECTION 4.06. Voting Rights....................................................................... 18
SECTION 4.07. Changes Affecting Deposited Securities and Reclassifications,
Recapitalizations, etc................................................. 18
SECTION 4.08. Inspection of Reports............................................................... 19
SECTION 4.09. Lists of Receipt Holders............................................................ 20
</TABLE>
ARTICLE V
The Depositary, the Depositary's Agents,
the Registrar and the Company
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by the Depositary;
Registrar.............................................................. 20
SECTION 5.02. Prevention of or Delay in Performance by the Depositary, the Depositary's
Agents, the Registrar or the Company................................... 21
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents, the Registrar
and the Company........................................................ 21
SECTION 5.04. Resignation and Removal of the Depositary; Appointment of Successor Depositary...... 23
SECTION 5.05. Corporate Notices and Reports....................................................... 24
SECTION 5.06. Indemnification by the Company...................................................... 24
SECTION 5.07. Charges and Expenses................................................................ 24
SECTION 5.08. Tax Compliance...................................................................... 25
SECTION 5.09. Deposit of Convertible Preferred Stock by the Company............................... 25
</TABLE>
ARTICLE VI
Amendment and Termination
<TABLE>
<S> <C> <C>
SECTION 6.01. Amendment........................................................................... 26
</TABLE>
ii
<PAGE> 4
<TABLE>
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<S> <C> <C>
SECTION 6.02. Termination......................................................................... 26
SECTION 2.03. Consents............................................................................ 26
</TABLE>
ARTICLE VII
Miscellaneous
<TABLE>
<S> <C> <C>
SECTION 7.01. Counterparts........................................................................ 27
SECTION 7.02. Exclusive Benefit of Parties........................................................ 28
SECTION 7.03. Invalidity of Provisions............................................................ 28
SECTION 7.04. Notices............................................................................. 28
SECTION 7.05. Depositary's Agents................................................................. 29
SECTION 7.06. Holders of Receipts Are Parties..................................................... 29
SECTION 7.07. Governing Law....................................................................... 29
SECTION 7.08. Inspection of Deposit Agreement..................................................... 29
SECTION 7.09. Headings............................................................................ 29
TESTIMONIUM........................................................................................... 30
SIGNATURES............................................................................................ 30
EXHIBIT A: Form of Depositary Receipt
EXHIBIT B: Resolutions
</TABLE>
iii
<PAGE> 5
DEPOSIT AGREEMENT dated as of April [6], 2000,
among NETWORK PLUS CORP., a Delaware corporation (the
"Company"), AMERICAN STOCK TRANSFER & TRUST COMPANY,
a New York corporation (the "Depositary"), and the
holders from time to time of the Receipts described
herein.
WHEREAS it is desired to provide, as hereinafter set forth in
this Deposit Agreement, for the deposit of 250,000 shares of Series A Cumulative
Convertible Preferred Stock, ($500 Liquidation Preference), of Network Plus
Corp. with the Depositary for the purposes set forth in this Deposit Agreement
and for the issuance hereunder of Receipts evidencing Depositary Shares in
respect of the Stock so deposited; and
WHEREAS the Receipts are to be substantially in the form of
Exhibit A hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, it is agreed by and among
the parties hereto as follows:
ARTICLE I
Definitions
The following definitions shall for all purposes, unless
otherwise indicated, apply to the respective terms used in this Deposit
Agreement:
"Authorizing Resolutions" shall mean the resolutions adopted
by the Board of Directors of the Company or a duly authorized committee thereof
establishing and setting forth the rights, preferences and privileges of the
Convertible Preferred Stock and filed in the form of a certificate of the voting
powers, designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations and restrictions thereof, of the
Convertible Preferred Stock with the Secretary of State of the State of Delaware
pursuant to Section 151 of the General Corporation Law of the State of Delaware,
attached hereto as Exhibit B.
<PAGE> 6
"Certificate" shall mean the certificate of designations to
the Certificate of Incorporation of the Company filed with the Secretary of
State of Delaware establishing the Convertible Preferred Stock as a series of
series preferred stock, without par value $.01, of the Company.
"Company" shall mean Network Plus Corp., a Delaware
corporation, and its successors.
"Convertible Preferred Stock" shall mean shares of the
Company's [ ]% Series A Cumulative Convertible Preferred Stock ($500 Liquidation
Preference per share).
"Deposit Agreement" shall mean this Deposit Agreement, as
amended or supplemented from time to time.
"Depositary" shall mean American Stock Transfer & Trust
Company, a [ ] corporation, and any successor as Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, each
representing one-tenth (1/10) of a share of Convertible Preferred Stock and
evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the
Depositary pursuant to Section 7.05.
"Depositary's Office" shall mean the principal office of the
Depositary in New York City, at which at any particular time its depositary
receipt business shall be administered.
"Paying Agent" shall have the meaning specified in the
Certificate.
"Receipt" shall mean one of the Depositary Receipts issued
hereunder, whether in definitive or temporary form.
"record holder" as applied to a Receipt shall mean the person
in whose name a Receipt is registered on the books of the Depositary maintained
for such purpose.
"Registrar" shall mean any bank or trust company which shall
be appointed to register ownership and transfers of Receipts as herein provided.
2
<PAGE> 7
ARTICLE II
Form of Receipts, Deposit of Convertible Preferred Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
SECTION 2.01. Form and Transferability of Receipts. Definitive
Receipts shall be printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, in each case with appropriate insertions, modifications and
omissions, as hereinafter provided. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Company delivered in
compliance with Section 2.02, shall execute and deliver temporary Receipts which
shall be printed, lithographed, typewritten, mimeographed or otherwise
substantially of the tenor of the definitive Receipts in lieu of which they are
issued and in each case with such appropriate insertions, omissions,
substitutions and other variations as the persons executing such Receipts may
determine, as evidenced by their execution of such Receipts. If temporary
Receipts are issued, the Company and the Depositary will cause definitive
Receipts to be prepared without unreasonable delay. After the preparation of
definitive Receipts, the temporary Receipts shall be exchangeable for definitive
Receipts upon surrender of the temporary Receipts at an office described in
Section 2.02, without charge to the holder. Upon surrender for cancellation of
any one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge therefor.
Until so exchanged, the temporary Receipts shall in all respects be entitled to
the same benefits under this Agreement, and with respect to the Convertible
Preferred Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual
signature of a duly authorized officer of the Depositary; provided, that such
signature may be a facsimile if a Registrar for the Receipts (other than the
Depositary) shall have been appointed and such Receipts are countersigned by
manual signature of a duly authorized officer of the Registrar. No Receipt shall
be entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed manually by a duly
authorized officer of the
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Depositary or, if a Registrar for the Receipts (other than the Depositary) shall
have been appointed, by manual or facsimile signature of a duly authorized
officer of the Depositary and countersigned manually by a duly authorized
officer of such Registrar. The Depositary shall record on its books each Receipt
so signed and delivered as hereinafter provided.
Receipts shall be in denominations of any number of whole
Depositary Shares up to but not in excess of Depositary Shares for any
particular Receipt.
Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Deposit Agreement as may be required by the Depositary or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to Depositary Shares (and the interest in the
Convertible Preferred Stock evidenced thereby) evidenced by a Receipt that is
properly endorsed, or accompanied by a properly executed instrument of transfer,
shall be transferable by delivery with the same effect as in the case of a
negotiable instrument; provided, however, that until transfer of a Receipt shall
be registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or payments with respect to the Convertible Preferred Stock, to
exercise conversion rights or to receive any notice provided for in this Deposit
Agreement and for all other purposes.
The Depositary shall not lend any Convertible Preferred Stock
deposited hereunder.
SECTION 2.02. Deposit of Convertible Preferred Stock;
Execution and Delivery of Receipts in Respect Thereof. Subject to the terms and
conditions of this Deposit Agreement, the Company or any holder of Convertible
Preferred Stock may from time to time deposit shares of the Convertible
Preferred Stock under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Convertible Preferred Stock to be deposited,
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properly endorsed or accompanied, if required by the Depositary, by a duly
executed instrument of transfer or endorsement, in form satisfactory to the
Depositary, together with all such certifications as may be required by the
Depositary in accordance with the provisions of this Deposit Agreement, and
together with a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to, or upon the written order
of, the person or persons stated in such order a Receipt or Receipts for the
number of Depositary Shares representing such deposited Convertible Preferred
Stock.
Deposited Convertible Preferred Stock shall be held by the
Depositary at the Depositary's Office or at such other place or places as the
Depositary shall determine.
Simultaneously with the execution and delivery hereof, the
Company, on behalf of each underwriter of an interest in the Convertible
Preferred Stock that is to be represented by the Depositary Shares, is
depositing under this Deposit Agreement certificates representing all
outstanding shares of Convertible Preferred Stock, together with a written order
directing the Depositary to execute and deliver Depositary Shares representing
such Convertible Preferred Stock registered in such names as have been
designated in writing by Goldman, Sachs & Co., as the representative of the
underwriters for the Depositary Shares that are to represent such Convertible
Preferred Stock.
Upon each delivery to the Depositary of a certificate or
certificates for Convertible Preferred Stock to be deposited hereunder in
accordance with the provisions of this Section, together with the other
documents required as above specified, and as soon as transfer and recordation
of the Convertible Preferred Stock on the books of the Company in the name of
the Depositary or its nominee can be accomplished, the Depositary, subject to
the terms and conditions of this Deposit Agreement, shall execute and deliver
to, or upon the order of, the Exchange Agent a Receipt or Receipts for the
number of Depositary Shares representing the Convertible Preferred Stock so
deposited and registered in such name or names of the person or persons as
specified in the written order delivered to the Depositary referred to in the
first paragraph of this Section. Deposited Convertible Preferred Stock shall be
held by the Depositary in trust for the benefit of the holders from time to time
of the Depositary Shares at the principal office of the Depositary or at such
other place or places as the Depositary shall determine, such deposited
Convertible Preferred Stock (and any dividends or other
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distributions thereon) to be at all times segregated, separate and apart from
the property of the Depositary.
Upon receipt by the Depositary of a certificate or
certificates for Convertible Preferred Stock deposited in accordance with the
provisions of this Section 2.02, together with the other documents required as
above specified and upon recordation of such Convertible Preferred Stock on the
books of the Company in the name of the Depositary or its nominee, the
Depositary, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver to or upon the order of the person or persons named in the
written order referred to above in this Section 2.02 one or more Depositary
Shares for the number of Depositary Shares attributable to such Convertible
Preferred Stock so deposited and registered in such name or names as requested
by such person or persons. The Depositary shall execute and deliver such Receipt
or Receipts at the Depositary's Office or such other offices, if any, as the
Depositary may designate. Delivery at other offices shall be at the risk and
expense of the person requesting such delivery. However, in each case subsequent
to the initial deposit hereunder, such delivery will be made only upon payment
to the Depositary of all taxes and governmental charges and fees payable in
connection with such deposit and the transfer of the deposited Convertible
Preferred Stock. The Depositary shall not issue any Depositary Shares
certificates other than Depositary Shares certificates for Depositary Shares
representing Convertible Preferred Stock actually deposited with the Depositary.
Other than in the case of splits, combinations or other
reclassifications affecting the Convertible Preferred Stock, or in the case of
dividends or other distributions of Convertible Preferred Stock, if any, or
unless the Company provides written notice to the Depositary as to a different
number of shares of Convertible Preferred Stock, there shall be deposited
hereunder not more than 250,000 shares of Convertible Preferred Stock.
SECTION 2.03. Conversion at the Option of Holders. Subject to
the terms and conditions of this Deposit Agreement and the Authorizing
Resolutions, Depositary Shares may be surrendered at any time by the holders
thereof with written instructions to the Depositary to convert any specified
number of shares of Convertible Preferred Stock represented by such Depositary
Shares into shares of Common Stock (and cash in lieu of fractional shares of
Common Stock) at the conversion rate in respect of the Convertible Preferred
Stock determined in accordance
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with the Authorizing Resolutions. A holder of Depositary Shares may surrender
such Depositary Shares at such office as the Depositary may from time to time
designate for such purpose, together with a notice of conversion thereof duly
completed and executed, thereby instructing the Depositary to cause the
conversion of the number of shares of Convertible Preferred Stock specified in
such notice of conversion into shares of Common Stock.
Upon receipt by the Depositary of a Depositary Shares
certificate, together with a notice of conversion supplied by the Company
containing the applicable conversion rate instructing the Depositary to convert
a specified number of shares of Convertible Preferred Stock duly completed and
executed, the Depositary shall (a) give written notice to the transfer agent for
the Convertible Preferred Stock of the number of shares of Convertible Preferred
Stock surrendered for conversion and the number of shares of Common Stock to be
delivered upon conversion of such shares of Convertible Preferred Stock and the
amount of immediately available funds, if any, to be delivered to the holder of
such Depositary Shares in payment of any fractional shares of Common Stock
otherwise issuable, (b) cancel such Depositary Shares certificate or, if a
Registrar for Depositary Shares certificates (other than the Depositary) shall
have been appointed, cause such Registrar to cancel such Depositary Shares
certificate and (c) deliver to the transfer agent for the Convertible Preferred
Stock or any other authorized agent of the Company certificates for the
Convertible Preferred Stock represented by such Depositary Shares, which
certificates shall thereupon be canceled by such transfer agent or other
authorized agent. As promptly as practicable after such transfer agent or other
authorized agent of the Company has received such certificates from the
Depositary, (a) the Company shall cause to be furnished to the Depositary a
certificate or certificates evidencing such number of shares of Common Stock,
and such amount of immediately available funds, if any, as specified in a
written notice to the Company and (b) subject to the next succeeding sentence,
the Depositary shall deliver at its office designated for such purpose or such
other place as may be requested by any holder surrendering Depositary Shares as
provided in this Section 2.03 (i) a certificate or certificates evidencing the
number of shares of Common Stock into which the Convertible Preferred Stock
represented by the Depositary Shares has been converted,(ii) cash in lieu of
receiving fractional shares of Common Stock in accordance with Section 2.06 and
(iii) the right to receive cash in an amount in an amount equal to all accrued
and unpaid
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dividends on such shares of Convertible Preferred Stock to the extent provided
in the Certificate of Designations for the Convertible Preferred Stock. However,
if a number of Depositary Shares that is not divisible by 10, without remainder,
is submitted for conversion, any fractional share of Convertible Preferred Stock
otherwise issuable upon such conversion will be rounded down.
Upon any optional conversion of the Convertible Preferred
Stock represented by the Depositary Shares, no allowance, adjustment or payment
shall be made with respect to dividends upon such Convertible Preferred Stock or
shares of Common Stock issued upon the conversion thereof, except as set forth
in the Authorizing Resolutions. If Depositary Shares representing shares of
Convertible Preferred Stock (other than Depositary Shares called for redemption
within such period in connection with a redemption of Convertible Preferred
Stock) are surrendered for conversion between the close of business on the
record date with respect to any dividend payment on such Convertible Preferred
Stock and the opening of business on the next succeeding dividend payment date,
any holder of Depositary Shares surrendered with instructions to the Depositary
for conversion of the Convertible Preferred Stock represented thereby shall
remit to the Depositary with such Depositary Shares an amount of funds equal to
the dividend payable on the underlying Convertible Preferred Stock on such
dividend payment date computed and paid as set forth in the Authorizing
Resolutions.
Delivery of Common Stock and other property may be made by the
delivery of certificates and other proper documents of title, which, if required
by law, shall be properly endorsed or accompanied by proper instruments of
transfer. If such delivery is to be made otherwise than at the Depositary's
corporate trust office in New York City, such delivery shall be made, as
hereinafter provided, without unreasonable delay, at the risk of any holder
surrendering Depositary Shares, and for the account of such holder, to such
place designated in writing by such holder.
SECTION 2.04. Redemption of Convertible Preferred Stock. The
Convertible Preferred Stock represented by the Depositary Shares shall not be
redeemable by the Company prior to April 10, 2005. At any time and from time to
time on or after that date until immediately prior to the Mandatory Redemption
Date, the Company will have the right to redeem, in whole or in part, the
Convertible Preferred Stock represented by the Depositary Shares, at the price
per share of Convertible Preferred Stock specified pursuant to
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the Authorizing Resolutions. Whenever the Company shall elect under the
Authorizing Resolutions to redeem shares of Convertible Preferred Stock, the
Depositary shall effect a simultaneous redemption, from the proceeds of such
redemption by the Company, of a number of Depositary Shares representing a
number of shares of Convertible Preferred Stock equal to the number of shares of
Convertible Preferred Stock being redeemed. In the case of any such redemption,
the Company shall give the Depositary not less than 30 nor more than 60 days'
notice of the date of such proposed redemption (the "redemption date"), the
number of shares of the Convertible Preferred Stock held by the Depositary to be
so redeemed, the number of Depositary Shares to be simultaneously redeemed and
the applicable redemption price, including the amount of any accumulated and
unpaid dividends to the date of such redemption computed as provided in the
Authorizing Resolutions. The Depositary shall mail notice of such redemption
(which shall also constitute a notice of redemption of Depositary Shares), by
first-class mail, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, to the holders of record of Depositary Shares
representing a number of shares of Convertible Preferred Stock equal to the
number of shares of Convertible Preferred Stock held by the Depositary that are
to be redeemed by the Company, at the addresses of such holders as the same
appear on the records of the Depositary; but neither failure to mail any such
notice, nor any defect in any notice, to one or more holders shall affect the
validity of the proceedings for redemption except as to any holder to whom the
Depositary has failed to give said notice or whose notice was defective. Each
such notice shall state the redemption date, the number of shares of Convertible
Preferred Stock and number of Depositary Shares to be redeemed, and, if less
than all the shares of Convertible Preferred Stock represented by Depositary
Shares are to be redeemed, the number of Depositary Shares to be redeemed from
such holder; the applicable redemption price; that dividends in respect of the
Convertible Preferred Stock represented by such Depositary Shares to be redeemed
will cease to accrue as of the date specified in the notice of redemption from
the Company; that the conversion rights with respect to such shares of
Convertible Preferred Stock will cease as of the redemption date (except as
described below), and instructions for the surrender of the certificates
representing the Depositary Shares to be redeemed. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the holder receives the notice. The Company shall make a
public announcement (by press release to the Dow Jones News Service) of any call
for redemption prior to or at the time
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of the mailing of such notice of redemption. In case less than all the
outstanding shares of Convertible Preferred Stock represented by Depositary
Shares are to be called for redemption, the Depositary Shares to be redeemed
(which shall represent a number of shares of Convertible Preferred Stock equal
to the total number of shares of Convertible Preferred Stock being held by the
Depositary that are to be redeemed) shall be selected by the Depositary in the
same manner as that determined by the Company with respect to the redemption by
the Company of the shares of Convertible Preferred Stock.
Notice having been mailed by the Depositary as aforesaid, on
and after the redemption date, the Depositary Shares to be redeemed shall no
longer be deemed outstanding and all rights of the holders of such Depositary
Shares including any accrued and unpaid dividends shall cease, except the right
to receive a distribution of the redemption price, without interest as provided
herein, (unless the Company defaults in payment of the redemption price). As of
the close of business on the redemption date, if the Company shall have redeemed
the shares of Convertible Preferred Stock called for redemption, upon surrender
in accordance with such notice of the certificates representing the Depositary
Shares being redeemed from the proceeds of such redemption (properly endorsed or
assigned for transfer, if required and stated in such notice), the holders of
such Depositary Shares shall be entitled to receive, for each Depositary Share
surrendered, an amount equal to the redemption price per 1/10-share (10%) of
Convertible Preferred Stock redeemed plus all money and other property, if any,
attributable thereto pursuant to the Authorizing Resolutions, including cash in
lieu of any fractional shares of Common Stock in accordance with Section 2.06.
On or promptly following the redemption date, the Depositary shall surrender all
shares of Convertible Preferred Stock held by it that have been redeemed.
If less than all of the Depositary Shares represented by a
Depositary Shares certificate are called for redemption, the Depositary will
deliver to the holder of the Depositary Shares certificate upon the later of (i)
the surrender of the Depositary Shares certificate to the Depositary and (ii)
the redemption date a new Depositary Shares certificate representing the
Depositary Shares not called for redemption together with the redemption
payment.
If a notice of redemption of any shares of Convertible
Preferred Stock represented by Depositary Shares has been given pursuant to this
Section 2.05, the right to
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convert the shares of Convertible Preferred Stock represented by such Depositary
Shares will terminate immediately prior to the close of business on the relevant
redemption date.
Unless the Convertible Preferred Stock has already been
redeemed or converted, the Company will be required to redeem the Convertible
Preferred Stock on April 1, 2012, at a redemption price equal to 100% of the
liquidation preference, together with accumulated and unpaid dividends to April
1, 2012.
SECTION 2.05. Registration of Transfer of Receipts. Subject to
the terms and conditions of this Deposit Agreement, the Depositary shall
register on its books from time to time transfers of Receipts upon any surrender
thereof by the holder in person or by duly authorized attorney, properly
endorsed or accompanied by a properly executed instrument of transfer. Thereupon
the Depositary shall execute a new Receipt or Receipts evidencing the same
aggregate number of Depositary Shares as those evidenced by the Receipt or
Receipts surrendered and deliver such new Receipt or Receipts to or upon the
order of the person entitled thereto.
SECTION 2.06. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Convertible Preferred Stock. Upon
surrender of a Receipt or Receipts at the Depositary's Office or at such other
offices as it may designate for the purpose of effecting a split-up or
combination of such Receipt or Receipts, and subject to the terms and conditions
of this Deposit Agreement, the Depositary shall execute and deliver a new
Receipt or Receipts in the authorized denomination or denominations requested,
evidencing the aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
Any holder of a Receipt or Receipts representing any number of
whole shares of Convertible Preferred Stock may (unless the related Depositary
Shares have previously been converted or called for redemption) withdraw the
Convertible Preferred Stock on the basis of one share of Convertible Preferred
Stock for every ten Depositary Shares surrendered and all money and other
property, if any, represented thereby by surrendering such Receipt or Receipts,
at the Depositary's office or at such other offices as the Depositary may
designate for such withdrawals. Thereafter, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or persons designated
by such holder as hereinafter provided,
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the number of whole shares of Convertible Preferred Stock and all money and
other property, if any, represented by the Receipt or Receipts so surrendered
for withdrawal, but holders of such whole shares of Convertible Preferred Stock
will not thereafter be entitled to deposit such Convertible Preferred Stock
hereunder or to receive Depositary Shares therefor. However, if a Receipt
delivered by the holder to the Depositary in connection with such withdrawal
shall evidence a number of Depositary Shares that is not divisible by 10,
without remainder, any fractional share of Convertible Preferred Stock otherwise
issuable upon conversion will be rounded down. Delivery of the Convertible
Preferred Stock and money and other property being withdrawn may be made by the
delivery of such certificates, documents of title, which, if required by law,
shall be properly endorsed or accompanied by proper instruments of transfer, and
other instruments as the Depositary may deem appropriate.
If the Convertible Preferred Stock and the money and other
property being withdrawn are to be delivered to a person or persons other than
the record holder of the Receipt or Receipts being surrendered for withdrawal of
Convertible Preferred Stock, such holder shall execute and deliver to the
Depositary a written order so directing the Depositary and the Depositary may
require that the Receipt or Receipts surrendered by such holder for withdrawal
of such shares of Convertible Preferred Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank.
Delivery of the Convertible Preferred Stock and the money and
other property, if any, represented by Receipts surrendered for withdrawal shall
be made by the Depositary at the Depositary's Office, except that, at the
request, risk and expense of the holder surrendering such Receipt or Receipts
and for the account of the holder thereof, such delivery may be made at such
other place as may be designated by such holder.
SECTION 2.07. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, or the exercise of any right of conversion, redemption
or withdrawal, the Depositary, any of the Depositary's Agents or the Company may
require payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement to
it) of any charges or expenses
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payable by the holder of a Receipt pursuant to Section 5.07, may require the
production of evidence satisfactory to it as to the identity and genuineness of
any signature and may also require compliance with such regulations, if any, as
the Depositary or the Company may establish consistent with the provisions of
this Deposit Agreement, or with the approval of the Company, for any other
reason. Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Convertible Preferred Stock
in connection with a distribution of Depositary Shares which is required to be
registered under the Securities Act of 1933, unless a registration statement
under such Act is in effect as to such Depositary Shares and such Convertible
Preferred Stock.
The deposit of Convertible Preferred Stock may be refused, the
delivery of Receipts against Convertible Preferred Stock may be suspended, the
registration of transfer of Receipts may be refused and the registration of
transfer, surrender or exchange of outstanding Receipts may be suspended (i)
during any period when the register of stockholders of the Company is closed or
(ii) if any such action is deemed necessary or advisable by the Depositary, any
of the Depositary's Agents or the Company at any time or from time to time
because of any requirement of law or of any government or governmental body or
commission or under any provision of this Deposit Agreement.
SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his or her ownership thereof and (ii) the furnishing to the Depositary with
reasonable indemnification and/or surety bond satisfactory to it.
SECTION 2.09. Cancelation and Destruction of Surrendered
Receipts. All Receipts surrendered to the Depositary or any Depositary's Agent
shall be canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.
SECTION 2.10. Lost Depositary Share Certificates,
etc. In case any Depositary Share certificate shall be
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mutilated or be destroyed or lost or stolen, the Depositary will execute and
deliver a Depositary Share certificate of like form and tenor in exchange and
substitution for such mutilated Depositary Share certificate, or in lieu of and
in substitution for such destroyed, lost or stolen Depositary Share certificate,
upon the holder thereof filing with the Registrar evidence satisfactory to the
Depositary of such destruction, loss or theft of such Depositary Share
certificate and the authenticity thereof and of his ownership thereof and
furnishing the Depositary with reasonable indemnification and/or surety bond
satisfactory to it.
ARTICLE III
Certain Obligations of Holders
of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other
Information. Any holder of a Receipt may be required from time to time to file
such proof of residence, or other matters or other information, to execute such
certificates and to make such representations and warranties as the Depositary
or the Company may be reasonably deem necessary or proper. The Depositary or the
Company may withhold the delivery, or delay the registration of transfer,
redemption or exchange, of any Receipt or the withdrawal of the Convertible
Preferred Stock represented by the Depositary Shares evidenced by any Receipt or
the distribution of any dividend or other distribution or the sale of any rights
or of the proceeds thereof or of the proceeds of the exercise of any conversion
right specified in Section 2.03 or the mandatory redemption pursuant to Section
2.04 until such proof or other information is filed or such certificates are
executed or such representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges.
Holders of Receipts shall be obligated to make payments to the Depositary of
certain charges and expenses, as provided in Section 5.07. Registration of
transfer of any Receipt or any withdrawal of Convertible Preferred Stock and all
money or other property, if any, represented by the Depositary Shares evidenced
by such Receipt or of the proceeds of the exercise of any conversion right
specified in Section 2.03 or the mandatory redemption pursuant to Section 2.04
may be refused until any such payment due is made, and any dividends, interest
payments or other distributions may be withheld or any part of or all the
Convertible Preferred Stock or other property represented by the Depositary
Shares evidenced by such
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Receipt and not theretofore sold may be sold for the account of the holder
thereof (after attempting by reasonable means to notify such holder prior to
such sale), and such dividends, interest payments or other distributions or the
proceeds of any such sale or of the proceeds of the exercise of any conversion
right specified in Section 2.03 or the mandatory redemption pursuant to Section
2.04 may be applied to any payment of such charges or expenses, the holder of
such Receipt remaining liable for any deficiency.
SECTION 3.03. Warranty as to Convertible Preferred Stock. The
Company hereby represents, with respect to the initial deposit of Convertible
Preferred Stock, and each subsequent depositor shall be deemed to represent,
with respect to any deposit made by such person, that each certificate for such
Convertible Preferred Stock so deposited is valid, and that the person making
such deposit is duly authorized so to do. The Company hereby further represents
and warrants that the Convertible Preferred Stock, when issued, will be validly
issued, fully paid and nonassessable. Such representation and warranty shall
survive the deposit of the Convertible Preferred Stock and the issuance of
Receipts.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the Depositary
shall receive any cash dividend or other cash distribution on the Convertible
Preferred Stock, the Depositary shall, subject to Sections 3.01 and 3.02 hereof,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of such dividend or distribution as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required to withhold and shall withhold
from any cash dividend or other cash distribution in respect of the Convertible
Preferred Stock an amount on account of taxes, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for distribution,
as the case may be, only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent, and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added
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to and be treated as part of the next sum received by the Depositary for
distribution of record holders of Receipts then outstanding.
SECTION 4.02. Distribution Other than Cash, Rights,
Preferences or Privileges. Whenever the Depositary shall receive any
distribution other than cash, rights, preferences or privileges upon Convertible
Preferred Stock, the Depositary shall, subject to Sections 3.01 and 3.02 hereof,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of the securities or property received by it as are,
as nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution. If in the opinion of the Depositary such distribution cannot be
made proportionately among such record holders, or if for any other reason
(including any requirement that the Company or the Depositary withhold an amount
on account of taxes) the Depositary deems, after consultation with the Company,
such distribution not to be feasible, the Depositary may, with the approval of
the Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the sale (at public or private
sale) of the securities or property thus received, or any part thereof, at such
place or places and upon such terms as it may deem proper. The net proceeds of
any such sale shall, subject to Sections 3.01 and 3.02, be distributed or made
available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.01 in the case of a distribution
received in cash. The Company shall not make any distribution of such securities
unless the Company shall have provided an opinion of counsel stating that such
securities have been registered under the Securities Act of 1933 or do not need
to be registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges.
If the Company shall at any time offer or cause to be offered to the persons in
whose names Convertible Preferred Stock is recorded on the books of the Company
any rights, preferences or privileges to subscribe for or to purchase any
securities or any rights, preferences or privileges of any other nature, such
rights, preferences or privileges shall in each such instance be made available
by the Depositary to the record holders of Receipts in such manner as the
Depositary may determine, either by the issue to such record holders of warrants
representing such rights, preferences or privileges or by such other method as
may be
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approved by the Depositary in its discretion, with the approval of the Company;
provided, however, that (i) if at the time of issue or offer of any such rights,
preferences or privileges the Depositary determines (after consultation with the
Company) that it is not lawful or not feasible to make such rights, preferences
or privileges available to holders of Receipts by the issue of warrants or
otherwise, or (ii) if and to the extent so instructed by holders of Receipts who
do not desire to exercise such rights, preferences or privileges, then the
Depositary, in its discretion (with the approval of the Company, in any case
where the Depositary has determined that it is not feasible to make such rights,
preferences or privileges available), may, if applicable laws or the terms of
such rights, preferences or privileges permit such transfer, sell such rights,
preferences or privileges at public or private sale, at such place or places and
upon such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Sections 3.01 and 3.02, be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.01 in the
case of a distribution received in cash. The Company shall not make any
distribution of any such rights, preferences or privileges unless the Company
shall have provided an opinion of counsel stating that such rights, preferences
or privileges have been registered under the Securities Act of 1933 or do not
need to be registered.
If registration under the Securities Act of 1933 of the
securities to which any rights, preferences or privileges relate is required in
order for holders of Receipts to be offered or sold the securities to which such
rights, preferences or privileges relate, the Company agrees with the Depositary
that it will file promptly a registration statement pursuant to such Act with
respect to such rights, preferences or privileges and securities and use its
best efforts and take all steps available to it to cause such registration
statement to become effective sufficiently in advance of the expiration of such
rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges. In no event shall the Depositary make
available to the holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until such registration
statement shall have become effective, or unless the offering and sale of such
securities to such holders are exempt from registration under the provisions of
such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for
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such rights, preferences or privileges to be made available to holders of
Receipts, the Company agrees with the Depositary that the Company will use its
best efforts to take such action or obtain such authorization, consent or permit
sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date
for Holders of Receipts. Whenever any cash dividend or other cash distribution
shall become payable or any distribution other than cash shall be made, or if
rights, preferences or privileges shall at any time be offered, with respect to
the Convertible Preferred Stock, or whenever the Depositary shall receive notice
of any meeting at which holders of Convertible Preferred Stock are entitled to
vote or of which holders of Convertible Preferred Stock are entitled to notice
or any request for action by written consent, or whenever the Depositary and the
Company shall decide it is appropriate, the Depositary shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Convertible Preferred Stock) for the
determination of the holders of Receipts who shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof, or to give instructions for the exercise of voting rights at
any such meeting, or who shall be entitled to notice of such meeting or any
request for action by written consent or for any other appropriate reasons.
SECTION 4.05. Notice of Change of Control. Upon receipt of
notice of any change of control offer (as defined in the Certificate of
Designations with respect to the Convertible Preferred Stock), the Depositary
shall, as soon as practicable thereafter, mail to the record holders of Receipts
a notice which shall contain (i) such information as is contained in such notice
of change of control offer and (ii) if applicable, a statement that the holders
may, subject to any applicable restrictions, instruct the Depositary as to the
exercise of the voting rights of the holders in compliance with Section 4.06
herein. Upon receipt of notice from the Company of any change of control (as
defined in the Certificate of Designations with respect to the Convertible
Preferred Stock), the Depositary shall, as soon as practicable thereafter, mail
to the record holders of Receipts a notice that shall contain (i) a description
of the transaction or transactions constituting the change of control and (ii)
the offer from the Company to
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repurchase the Depositary Shares or Convertible Preferred Stock, as the case may
be, on the date specified in such notice, pursuant to the procedures set forth
in the Certificate of Designations with respect to the Convertible Preferred
Stock.
SECTION 4.06. Voting Rights. Upon receipt of notice of any
meeting at which the holders of Convertible Preferred Stock are entitled to
vote, the Depositary shall, as soon as practicable thereafter, mail to the
record holders of Receipts a notice which shall contain (i) such information as
is contained in such notice of meeting and (ii) a statement that the holders
may, subject to any applicable restrictions, instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of Convertible Preferred
Stock represented by their respective Depositary Shares (including an express
indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Company) and a brief statement
as to the manner in which such instructions maybe be given. Upon the written
request of the holders of Receipts on the relevant record date (which shall be
the same date as the record date for the Convertible Preferred Stock), the
Depositary shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of whole shares of Convertible Preferred Stock represented by the
Depositary Shares evidenced by all Receipts as to which any particular voting
instructions are received. The Company hereby agrees to take all action which
may be deemed necessary by the Depositary in order to enable the Depositary to
vote such Convertible Preferred Stock or cause such Convertible Preferred Stock
to be voted. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting (but, at its discretion, not
from appearing at any meeting with respect to such Convertible Preferred Stock
unless directed to the contrary by the holders of all the Receipts) to the
extent of the Convertible Preferred Stock represented by the Depositary Shares
evidenced by such Receipt. Any voting instructions given hereunder shall be
revocable to the same extent as a proxy granted with respect to the Convertible
Preferred Stock represented thereby.
SECTION 4.07. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par or stated
value or liquidation preference, split-up, combination or any other
reclassification of the Convertible Preferred Stock, or upon any
recapitalization, reorganization, merger, amalgamation
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or consolidation affecting the Company or to which it is a party, the Depositary
may in its discretion with the approval of, and shall upon the instructions of,
the Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments as are certified by the Company in (x) the
fraction of an interest represented by one Depositary Share in one share of
Convertible Preferred Stock and (y) the ratio of the redemption price per
Depositary Share to the redemption price of a share of Convertible Preferred
Stock, in each case as may be necessary fully to reflect the effects of such
change in par or stated value or liquidation preference, split-up, combination
or other reclassification of Convertible Preferred Stock, or of such
recapitalization, reorganization, merger, amalgamation or consolidation and (ii)
treat any securities which shall be received by the Depositary in exchange for
or upon conversion of or in respect of the Convertible Preferred Stock as new
deposited securities so received in exchange for or upon conversion or in
respect of such Convertible Preferred Stock. In any such case, the Depositary
may in its discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding Receipts
to be exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of Receipts
shall have the right from and after the effective date of any such change in par
or stated value or liquidation preference, split-up, combination or other
reclassification of the Convertible Preferred Stock or any such
recapitalization, reorganization, merger, amalgamation or consolidation to
surrender such Receipts to the Depositary with instructions to convert, exchange
or surrender the Convertible Preferred Stock represented thereby only into or
for, as the case may be, the kind and amount of shares of stock and other
securities and property and cash into which the Convertible Preferred Stock
represented by such Receipts might have been converted or for which such
Convertible Preferred Stock might have been exchanged or surrendered immediately
prior to the effective date of such transaction.
SECTION 4.08. Inspection of Reports. The Depositary shall
transmit to the record holders of Receipts, at the addresses of such record
holders as set forth on the books of the Depositary, and shall make available
for inspection by holders of Receipts at the Depositary's office, and at such
other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Convertible Preferred Stock. The Registrar for
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the Depositary Shares will keep books for the transfer of the Depositary Shares.
At all reasonable times such books will be open for inspection by holders of the
Depositary Shares to the same extent as a record holder of the shares of
Convertible Preferred Stock may inspect books for the transfer thereof.
SECTION 4.09. Lists of Receipt Holders. Promptly upon request
from time to time by the Company, the Depositary shall furnish to it a list, as
of a recent date, of the names, addresses and holdings of Depositary Shares of
all persons in whose names Receipts are registered on the books of the
Depositary.
ARTICLE V
The Depositary, the Depositary's Agents,
the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar. Upon execution of this Deposit Agreement and
until termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain at the Depositary's Office, facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for
the registration and registration of transfer of Receipts, which books at all
reasonable times shall be open for inspection by the record holders of Receipts;
provided, that any such holder requesting to exercise such right shall certify
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books, at any time or from time
to time, when deemed expedient by it in connection with the performance of its
duties hereunder.
The Depositary may, with the approval of the Company, appoint
a Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby or the
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Convertible Preferred Stock represented by such Depositary Shares shall be
listed on the Nasdaq National Market, the Depositary will appoint a Registrar
(acceptable to the Company) for registration of such Receipts or Depositary
Shares in accordance with any requirements of the Nasdaq National Market. Such
Registrar (which may be the Depositary if so permitted by the requirements of
the Nasdaq National Market) may be removed and a substitute registrar appointed
by the Depositary upon the request or with the approval of the Company. If the
Receipts, such Depositary Shares or such Convertible Preferred Stock are listed
on one or more stock exchanges or other automated quotation systems, the
Depositary will, at the request of the Company, arrange such facilities for the
delivery, registration, registration of transfer, surrender and exchange of such
Receipts, such Depositary Shares or such Convertible Preferred Stock as may be
required by law or applicable stock exchange or automated quotation system
regulation.
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar or the Company. None of the
Depositary, any Depositary's Agent, the Registrar or the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Restated Certificate of Incorporation (including the
Certificate) or by reason of any act of God or war or other circumstance beyond
the control of the relevant party, the Depositary, the Depositary's Agent, the
Registrar or the Company shall be prevented or forbidden from, or subjected to
any penalty on account of, doing or performing any act or thing which the terms
of this Deposit Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, any Registrar or the Company incur any
liability to any holder of a Receipt (i) by reason of any nonperformance or
delay, caused as aforesaid, in the performance of any act or thing which the
terms of this Deposit Agreement provide shall or may be done or performed, or
(ii) by reason of any exercise of, or failure to exercise, any discretion
provided for in this Deposit Agreement except, in case of any such exercise or
failure to exercise discretion not caused as aforesaid, if caused by the
negligence or willful misconduct of the party charged with such exercise or
failure to exercise.
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SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company. None of the Depositary, any Depositary's
Agent, the Registrar or the Company assumes any obligation or shall be subject
to any liability under this Deposit Agreement to holders of Receipts other than
for its gross negligence or willful misconduct and each of them agrees to use
its best judgment and good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement and shall perform such duties
and otherwise act hereunder on behalf of the holders of Depositary Shares.
None of the Depositary, any Depositary's Agent, the Registrar
or the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding in respect of the Convertible Preferred
Stock, the Depositary Shares or the Receipts which in its opinion may involve it
in expense or liability unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
None of the Depositary, any Depositary's Agent, any Registrar
or the Company shall be liable for any action or any failure to act by it in
good faith reliance upon the written advice of legal counsel or accountants, or
information from any person presenting Convertible Preferred Stock for deposit,
any holder of a Receipt or any other person believed by it in good faith to be
competent to give such information. The Depositary, any Depositary's Agent, the
Registrar and the Company may each rely and shall each be protected in acting
upon any written notice, request, direction or other document believed by it to
in good faith be genuine and to have been signed or presented by the proper
party or parties.
The Depositary shall not be responsible for any failure to
carry out any instruction to vote any of the shares of Convertible Preferred
Stock or for the manner or effect of any such vote made, as long as any such
action or non-action is in good faith. The Depositary undertakes, and the
Registrar shall be required to undertake, to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Depositary or the
Registrar. The Depositary will be liable to the Company for any liability which
may arise out of acts performed or omitted by the Depositary or the Depositary's
Agents due to its or their gross negligence or willful misconduct. The
Depositary, the Depositary's Agents, and any Registrar may own and deal in any
class of securities of
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the Company and its affiliates and in Receipts. The Depositary may also act as
transfer agent or registrar of any of the securities of the Company and its
affiliates.
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary. The Depositary may at any time resign as
Depositary hereunder by notice of its election so to do delivered to the
Company, such resignation to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor Depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall
resign or be removed, the Company shall, within 45 days after the delivery of
the notice of resignation or removal, as the case may be, appoint a successor
Depositary, a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If no successor Depositary shall have been so appointed and have
accepted appointment within 45 days after delivery of such notice, the resigning
or removed Depositary may petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and deliver to its predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for all purposes shall be
the Depositary under this Deposit Agreement, and such predecessor, upon payment
of all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Convertible Preferred Stock and any moneys or property
held hereunder to such successor, and shall deliver to such successor a list of
the record holders of all outstanding Receipts. Any successor Depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary
may be merged, consolidated or converted shall be the
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successor of such Depositary without the execution or filing of any document or
any further act, and notice thereof shall not be required hereunder. Such
successor Depositary may authenticate the Receipts in the name of the
predecessor Depositary or in the name of the successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company
agrees that it will transmit to the record holders of Receipts, in each case at
the addresses furnished to it pursuant to Section 4.08, all notices and reports
(including without limitation financial statements) required by law, by the
rules of any national securities exchange upon which the Convertible Preferred
Stock, the Depositary Shares or the Receipts are listed or by the Company's
Restated Certificate of Incorporation (including the Certificate) to be
furnished by the Company to holders of Convertible Preferred Stock. Such
transmission will be at the Company's expense and the Company will provide the
Depositary with such number of copies of such documents as the Depositary may
reasonably request for such purpose. In addition, the Depositary will transmit
to the holders of Depositary Shares (at Company expense) such other documents as
may be requested by the Company. The Company further agrees that it will
promptly notify the Depositary in writing of any change in the conversion rate
and conversion price in respect of the Convertible Preferred Stock.
SECTION 5.06. Indemnification by the Company. The Company
shall indemnify the Depositary, any Depositary's Agent and any Registrar
against, and hold each of them harmless from, any loss, liability or expense
(including the costs and expenses of defending itself and reasonable counsel
fees) which may arise out of (a) acts performed or omitted in connection with
this Deposit Agreement and the Receipts (i) by the Depositary, the Registrar or
any of their respective agents (including any Depositary's Agent), except for
any liability arising out of negligence or bad faith on the respective parts of
any such person or persons, or (ii) by the Company or any of its agents, or (b)
the offer, sale or registration of the Receipts, the Depositary Shares or the
Convertible Preferred Stock pursuant to the provisions hereof. The obligations
of the Company set forth in this Section 5.06 shall survive any succession of
any Depositary, Registrar or Depositary's Agent.
SECTION 5.07. Charges and Expenses. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements hereunder. The Company shall pay all
charges of the Depositary in connection with the initial deposit of
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the Convertible Preferred Stock and the initial issuance of the Depositary
Shares, redemption of the Convertible Preferred Stock at the option of the
Company and all withdrawals of shares of the Convertible Preferred Stock by
owners of Depositary Shares. All other transfer and other taxes and governmental
charges shall be at the expense of holders of Depositary Shares. If, at the
request of a holder of Receipts, the Depositary incurs charges or expenses for
which it is not otherwise liable hereunder, such holder will be liable for such
charges and expenses. All other charges and expenses of the Depositary and any
Depositary's Agent hereunder and of the Registrar (including, in each case,
reasonable fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid upon consultation and agreement
between the Depositary and the Company as to the amount and nature of such
charges and expenses. The Depositary shall present its statement for charges and
expenses to the Company once every three months or at such other intervals as
the Company and the Depositary may agree.
SECTION 5.08. Tax Compliance. (a) The Depositary, on its own
behalf and on behalf of the Company will comply with all applicable
certification, information reporting and withholding (including "backup"
withholding) requirements imposed by applicable tax laws, regulations or
administrative practice with respect to (i) any payments made with respect to
the Depositary Shares or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Depositary Receipts or the Depositary
Shares. Such compliance shall include, without limitation, the preparation and
timely filing of required returns and the timely payment of all amounts required
to be withheld to the appropriate taxing authority or its designated agent.
(b) The Depositary shall comply with any direction received
from the Company with respect to the application of such requirements to
particular payments or holders or in other particular circumstances, and may for
purposes of this Agreement rely on any such direction in accordance with the
provisions of Section 5.03 hereof.
(c) The Depositary shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available on request to the Company or to its authorized representatives.
SECTION 5.09. Deposit of Convertible Preferred
Stock by the Company. The Company agrees with the
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Depositary that neither the Company nor any company controlled by the Company
will at any time deposit any Convertible Preferred Stock if such Convertible
Preferred Stock is required to be registered under the provisions of the
Securities Act of 1933 unless a registration statement is in effect as to such
Convertible Preferred Stock.
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment. The form of the Receipts and any
provisions of this Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary in any respect which
they may deem necessary or desirable; provided, however, that no such amendment
(other than any change in the fees of any Depositary, Registrar or Transfer
Agent) which shall materially and adversely alter the rights of the holders of
Receipts shall be effective unless such amendment shall have been approved by
the holders of Receipts evidencing at least 66-2/3% of the Depositary Shares
then outstanding. Every holder of an outstanding Receipt at the time any such
amendment becomes effective, or any transferee of such holder shall be deemed,
by continuing to hold such Receipt, or by reason of the acquisition thereof, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right, subject to
the applicable provisions hereof, of any owner of Depositary Shares to withdraw
the Convertible Preferred Stock represented by the Depositary Shares or to
convert the shares of Convertible Preferred Stock represented thereby into
Common Stock, except as provided in the Authorizing Resolutions or in order to
comply with mandatory provisions of applicable law.
SECTION 6.02. Termination. This Agreement may be terminated by
the Company or the Depositary only after (i) all outstanding Depositary Shares
shall have been redeemed pursuant to Section 2.03 or (ii) there shall have been
made a final distribution in respect of the Convertible Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distributions shall have been distributed to the holders of Receipts
evidencing the Depositary Shares pursuant to Section 4.01 or 4.02, as
applicable.
Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under
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this Deposit Agreement except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.06 and 5.07.
SECTION 6.03. Consents. Consents of holders of Depositary
Shares required by this Article VI may be evidenced by one or more instruments
signed by such holder or by his agent duly appointed in writing, and shall be
effective when delivered to the Depositary. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Deposit Agreement and conclusive in favor of the Depositary, the
Registrar and the Company, if made in the manner herein provided.
The execution of any proxy, consent or other instrument by the
holder of Depositary Shares or his agent or proxy shall be revocable, except as
otherwise specifically provided, and be deemed sufficient and conclusive for all
purposes of this Deposit Agreement if (a) the Depositary, Registrar or Company,
as the case may be, shall have mailed or delivered to the holder at his address
as shown on the books of the Depositary such proxy, consent or other instrument,
(b) the proxy, consent or other instrument shall have been returned to the
Depositary, Registrar or Company, as the case may be, bearing a signature
purporting and reasonably appearing to be that of the holder, his agent or
proxy, and (c) the person receiving the executed proxy, consent or other
instrument shall have no actual knowledge or notice of any irregularity or of
any fact or circumstance, which, if substantiated, would impair the validity of
such proxy, consent or other instrument. The matters referred to in clauses (a),
(b) and (c) above may be evidenced by a certificate of the Depositary, Registrar
or Company, as the case may be.
The ownership of Depositary Shares shall be proved by the
books of the Depositary or, if a Registrar for Depositary Shares (other than the
Depositary) shall have been appointed, the Registrar or by a certificate of the
Depositary or Registrar, as applicable.
The Depositary shall not be bound to recognize any person as a
holder unless and until his title to the Depositary Shares held by him is proved
in the manner provided herein.
Any such consent of the holder of any Depositary Shares shall
bind every future holder of the same Depositary Shares including the holder of
every Depositary Shares
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issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not notation of such consent is made upon any such
Depositary Shares.
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts. This Deposit Agreement may be
executed in any number of counterparts, and by each of the parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed an original, but all such counterparts taken together
shall constitute one and the same instrument.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit
Agreement is for the exclusive benefit of the parties hereto, and their
respective successors hereunder, and shall not be deemed to give any legal or
equitable right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or
more of the provisions contained in this Deposit Agreement or in the Receipts
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the
Company hereunder or under the Receipts shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by mail or telegram,
telex or telecopier confirmed by letter, addressed to the Company at 234
Copeland Street, Quincy, MA 02169, fax 617-786-4013 to the attention of the
Office of the Secretary, or at any other address of which the Company shall have
notified the Depositary in writing, with a copy to Hale and Dorr LLP, 60 State
Street, Boston, MA 02109, fax 617-526-5000, attention:
Jeffrey N. Carp, Esq.
Any and all notices to be given to the Depositary hereunder or
under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail or by telegram, telex or
telecopier confirmed by letter, addressed to the Depositary at the Depositary's
Office, at 40 Wall Street, New York, NY 10005, fax 718-236-4588, attention:
Executive Vice President
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or at any other address of which the Depositary shall have notified the Company
and the record holders of the Receipts in writing.
Any and all notices to be given to any record holder of a
Receipt hereunder or under the Receipts shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by mail or by telegram,
telex or telecopier confirmed by letter, addressed to such record holder at the
address of such record holder as it appears on the books of the Depositary, or
if such holder shall have filed with the Depositary a written request that
notices intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by telegram, telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a telegram,
telex or telecopier message) is deposited, postage prepaid, in a post office
letter box. The Depositary or the Company may, however, act upon any telegram,
telex or telecopier message received by it from the other or from any holder of
a Receipt, notwithstanding that such telegram, telex or telecopier message shall
not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from
time to time appoint Depositary's Agents to act in any respect for the
Depositary for the purposes of this Deposit Agreement and may at any time
appoint additional Depositary's Agents and vary or terminate the appointment of
such Depositary's Agent. The Depositary will notify the Company of any such
action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of
Receipts from time to time shall be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.
SECTION 7.07. Governing Law. This Deposit Agreement and the
Receipts and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 7.08. Inspection of Deposit Agreement. Copies of this
Deposit Agreement shall be filed with the Depositary and the Depositary's Agents
and shall be open to
30
<PAGE> 35
inspection during business hours at the Depositary's Office and the respective
offices of the Depositary's Agents, if any, by any holder of a Receipt.
SECTION 7.09. Headings. The headings of articles and sections
in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or the Receipts or to have any
31
<PAGE> 36
bearing upon the meaning or interpretation of any provision contained herein or
in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly
executed this Agreement as of the day and year first above set forth, and all
holders of Receipts shall become parties hereto by and upon acceptance by them
of delivery of Receipts issued in accordance with the terms hereof.
NETWORK PLUS CORP.,
by
------------------------------
AMERICAN STOCK TRANSFER &
TRUST COMPANY
by
------------------------------
32
<PAGE> 37
Exhibit A
[FORM OF FACE OF RECEIPT]
TEMPORARY RECEIPT - Exchangeable for Definitive Engraved Receipt When Ready for
Delivery
<TABLE>
<CAPTION>
NUMBER DEPOSITARY
<S> <C>
SHARES
</TABLE>
CERTIFICATE FOR ________________ DEPOSITARY SHARES
TDR
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, REPRESENTING 1/10 OF A SHARE OF
[]% Series A Cumulative Convertible Preferred Stock
($500 LIQUIDATION PREFERENCE) OF NETWORK PLUS CORP.
CUSIP _______
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE SEE REVERSE FOR
CERTAIN DEFINITIONS
[ ], as Depositary (the "Depositary"), hereby certifies that
is the registered owner of
DEPOSITARY SHARES
("Depositary Shares"), each Depositary Share representing 1/10 of one share of
[ ]% Series A Cumulative Convertible Preferred Stock ($500 Liquidation
Preference)(the "Convertible Preferred Stock"), of Network Plus Corp., a
Delaware corporation (the "Corporation"), on deposit with the Depositary,
subject to the terms and entitled to the benefits of the Deposit Agreement dated
as of _________, 2000 (the "Deposit
A-1
<PAGE> 38
Agreement"), among the Corporation, the Depositary and the holders from time to
time of the depositary receipts described therein. By accepting this Depositary
Receipt the holder hereof becomes a party to and agrees to be bound by all the
terms and conditions of the Deposit Agreement. This Depositary Receipt shall not
be valid or obligatory for any purpose or entitled to any benefits under the
Deposit Agreement unless it shall have been executed by the Depositary by the
manual signature of a duly authorized officer or, if executed in facsimile by
the Depositary, countersigned by a Registrar in respect of the Depositary
Receipts by the manual signature of a duly authorized officer thereof.
Dated: Countersigned:
[ ] [ ]
[ ]
Depositary Registrar Transfer Agent
By By By
Authorized officer Authorized Officer Authorized officer
A-2
<PAGE> 39
[FORM OF REVERSE OF RECEIPT]
NETWORK PLUS CORP.
NETWORK PLUS CORP. WILL FURNISH WITHOUT CHARGE TO EACH RECEIPT HOLDER WHO SO
REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR SUMMARY OF THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH THE CORPORATION IS
AUTHORIZED TO ISSUE AND -OF THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE
TRANSFER AGENT NAMED ON THE FACE OF THIS RECEIPT.
The following abbreviations when used in the inscription on the face of this
receipt shall be construed as though they were written out in full according to
applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - _________
Custodian _______ (Cust)
(Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
- ----------- -----------------
(State)
Additional abbreviations may also be used though not in the
above list
For value received, ______________________ hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP
CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
<PAGE> 40
- --------------------------------------------------------------------------------
Depositary Shares represented by the within Receipt, and do hereby irrevocably
constitute and appoint
- --------------------------------------------------------------------------------
Attorney to transfer the said Depositary Shares on the books of the within-named
Depositary with full power of substitution in the premises
Dated
---------------------
- --------------------------
Name:
Title:
NOTICE The signature to the assignment must correspond with the name as written
upon the face of this Receipt in every particular, without alteration or
enlargement or any change whatsoever.
2
<PAGE> 41
EXHIBIT B
[RESOLUTIONS]
B-1
<PAGE> 1
Exhibit 5
HALE AND DORR LLP
Counsellors At Law
60 State Street
Boston, MA 02109
617-526-6000 - 617-526-5000
April 4, 2000
Network Plus Corp.
234 Copeland Street
Quincy, MA 02169
Re: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration
Statement on Form S-3 (File No. 333-32040) (the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), for the registration
of shares of Common Stock, $.01 par value per share (the "Shares"), including
Shares issuable upon exercise of an over-allotment option granted by the
Company, of Network Plus Corp., a Delaware corporation (the "Company"), with a
maximum aggregate offering price of $287,500,000, of which certain Shares will
be issued and sold by the Company and the remaining Shares will be sold by
certain stockholders of the Company (the "Selling Stockholders").
The Shares are to be sold by the Company and the Selling Stockholders
pursuant to an underwriting agreement (the "Underwriting Agreement") to be
entered into by and among the Company, the Selling Stockholders and Goldman,
Sachs & Co., Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Fidelity
Capital Markets, a division of National Financial Services Corporation, and
Kaufman Bros., L.P., as representatives of the several underwriters named in the
Underwriting Agreement, the form of which has been filed as Exhibit 1 to the
Registration Statement.
We are acting as counsel for the Company in connection with the sale by
the Company and the Selling Stockholders of the Shares. We have examined signed
copies of the Registration Statement as filed with the Commission. We have also
examined and relied upon the Underwriting Agreement, minutes of meetings of the
stockholders and the Board of Directors of the Company as provided to us by the
Company, stock record books of the Company as provided to us by the Company, the
Certificate of Incorporation and By-Laws of the Company, each as restated and/or
amended to date, and such other documents as we have deemed necessary for
purposes of rendering the opinions hereinafter set forth.
<PAGE> 2
Network Plus Corp.
April 4, 2000
Page 2
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as copies, the authenticity of the originals of such latter documents and the
legal competence of all signatories to such documents.
Our opinion in clause (ii) below, insofar as it relates to the Selling
Stockholders' shares being fully paid, is based solely on a certificate of the
Chief Financial Officer of the Company confirming the Company's receipt of the
consideration called for by the applicable resolutions authorizing the issuance
of such shares.
We assume that the appropriate action will be taken, prior to the offer
and sale of the Shares in accordance with the Underwriting Agreement, to
register and qualify the shares for sale under all applicable state securities
or "blue sky" laws.
We express no opinion herein as to the laws of any state or
jurisdiction other than the state laws of the Commonwealth of Massachusetts, the
General Corporation Law of the State of Delaware and the federal laws of the
United States of America.
Based upon and subject to the foregoing, we are of the opinion that (i)
the Shares to be issued and sold by the company have been duly authorized for
issuance and, when such Shares are issued and paid for in accordance with the
terms and conditions of the Underwriting Agreement, such Shares will be validly
issued, fully paid and nonassessable and (ii) the Shares to be sold by the
Selling Stockholders have been duly authorized and are validly issued, fully
paid and nonassessable.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Shares while the Registration Statement is in
effect.
Please note that we are opining only as to the matters expressly set
forth herein, and no opinion should be inferred as to any other matters. This
opinion is based upon currently existing statutes, rules, regulations and
judicial decisions, and we disclaim any obligation to advise you of any change
in any of these sources of law or subsequent legal or factual developments which
might affect any matters or opinions set forth herein.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act and to the use of our
name therein and in the related Prospectus under the caption "Legal Matters." In
giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ HALE AND DORR LLP
HALE AND DORR LLP
