-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q5jkbeBh4y4TkGUhWFcIYYVLOVYcJTO5jG70mNwH2GG4OQhhPb/iD9gnVMN0fx0x zYTO3o+HlcT3FeAEG0PuUQ== 0000950135-00-002028.txt : 20000407 0000950135-00-002028.hdr.sgml : 20000407 ACCESSION NUMBER: 0000950135-00-002028 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20000406 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETWORK PLUS CORP CENTRAL INDEX KEY: 0001065633 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 043430576 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-32040 FILM NUMBER: 594637 BUSINESS ADDRESS: STREET 1: 234 COPELAND ST CITY: QUINCY STATE: MA ZIP: 02169 BUSINESS PHONE: 6177864000 MAIL ADDRESS: STREET 1: 234 COPELAND ST CITY: QUINCY STATE: MA ZIP: 02169 FORMER COMPANY: FORMER CONFORMED NAME: NETWORK PLUS INC DATE OF NAME CHANGE: 19980709 S-3/A 1 NETWORK PLUS CORP 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) DELAWARE 4813 04-3430576 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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: 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
------------------------ 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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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
EXHIBIT NO. DESCRIPTION - ------- ----------- 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.
- --------------- (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 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.
NAME TITLE ---- ----- * 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
*By: /s/ JAMES J. CROWLEY ----------------------------------------------------- James J. Crowley Attorney-in-fact 3 4 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ------- ----------- 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.
- --------------- (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. EX-1 2 FORM OF UNDERWRITING AGREEMENT 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 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; 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 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; 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; 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 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; 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 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 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 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"; 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. 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 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 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 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 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 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 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. 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 21 21 SCHEDULE I
Number of Optional TOTAL NUMBER Shares to be OF FIRM SHARES Purchased if TO BE Maximum Option UNDERWRITER PURCHASED Exercised ----------- --------- --------- 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..................................................................
SELLING STOCKHOLDERS TOTAL NUMBER ATTORNEY-IN-FACT OF FIRM SHARES TO BE SOLD ---------- Robert T. Hale.............................. James J. Crowley New Breeze Foundation....................... James J. Crowley
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 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. 24 Schedule 7(b) [To be replaced by draft of actual opinion] 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 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. 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. EX-4.3 3 FORM OF CERTIFICATE OF DESIGNATION 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; 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 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 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. 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:
Redemption Year Price - ---- ----- 2005......................................... % 2006......................................... % 2007......................................... % 2008......................................... % 2009......................................... % 2010......................................... % 2011......................................... % 2012......................................... %
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: 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 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: 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 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. 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 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 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 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 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 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. 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. 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 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 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 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 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, 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 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. 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 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. 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. 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. 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: 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 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. EX-4.4 4 FORM OF DEPOSIT AGREEMENT 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 2
Page ---- 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 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
ARTICLE III Certain Obligations of Holders of Receipts and the Company
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
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Page ---- ARTICLE IV The Deposited Securities; Notices 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
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.............................................................. 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
ARTICLE VI Amendment and Termination SECTION 6.01. Amendment........................................................................... 26
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Page ---- SECTION 6.02. Termination......................................................................... 26 SECTION 2.03. Consents............................................................................ 26
ARTICLE VII Miscellaneous 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
iii 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. 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 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 3 8 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, 4 9 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 5 10 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 6 11 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 7 12 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 8 13 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 9 14 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 10 15 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, 11 16 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 12 17 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 13 18 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 14 19 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 15 20 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 16 21 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 17 22 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 18 23 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 19 24 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 20 25 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 21 26 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. 22 27 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 23 28 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 24 29 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 25 30 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 26 31 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 27 32 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 28 33 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 29 34 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 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 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 37 Exhibit A [FORM OF FACE OF RECEIPT] TEMPORARY RECEIPT - Exchangeable for Definitive Engraved Receipt When Ready for Delivery
NUMBER DEPOSITARY SHARES
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 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 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 - -------------------------------------------------------------------------------- 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 41 EXHIBIT B [RESOLUTIONS] B-1 EX-5 5 OPINION OF HALE & DORR LLP 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. 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 -----END PRIVACY-ENHANCED MESSAGE-----