Exhibit 1.1
Draft of 5/16/00
3,000,000 Shares
NORTHEAST OPTIC NETWORKS, INC.
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
May____, 2000
May ___, 0000
XXXXXXX DILLON READ LLC
CREDIT SUISSE FIRST BOSTON CORPORATION,
as Managing Underwriters,
c/o Warburg Dillon Read LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
New England Business Trust, a Massachusetts business trust (the "Selling
Stockholder"), proposes to sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares")
of common stock, $.01 par value (the "Common Stock"), of NorthEast Optic
Network, Inc., a Delaware corporation (the "Company"). In addition, solely for
the purpose of covering over-allotments, the Selling Stockholder proposes to
grant to the Underwriters the option to purchase from the Selling Stockholder up
to an additional 450,000 shares of Common Stock (the "Additional Shares"). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the "Shares." The Shares are described in the Prospectus (as
defined below).
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Act"), with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3, (File No. 333- ) including a prospectus,
relating to the Shares, which incorporates by reference documents which the
Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"). The Company has furnished to you,
for use by the Underwriters and by dealers, copies of one or more preliminary
prospectuses and the documents incorporated by reference therein (each thereof,
including the documents incorporated therein by reference, being herein called a
"Preliminary Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended or supplemented when
it becomes effective, including all documents filed as a part thereof or
incorporated by reference therein, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430(A) under the Act and also including any
registration statement filed pursuant to Rule 462(b) under the Act, is herein
called the "Registration Statement," and the prospectus, including all documents
incorporated therein by reference, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be required
under the Act) or, if no such filing is required, the form of final prospectus
included in the Registration Statement at the time it became effective, is
herein called the "Prospectus."
The Company, the Selling Stockholder and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations
and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholder the respective number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A annexed hereto at a purchase price of $ per
share. The Company and the Selling Stockholder are advised by you that you
intend (i) to make a public offering of their respective portions of the Firm
Shares as soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the terms
set forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Selling Stockholder hereby grants to the several
Underwriters the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholder ratably in accordance with the number of Firm Shares to
be purchased by each of them (subject to such adjustment as you shall determine
to avoid fractional shares), all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Selling Stockholder for the Firm Shares. This option may be exercised by
you on behalf of the several Underwriters at any time (but not more than once)
on or before the thirtieth day following the date hereof, by written notice to
the Company and the Selling Stockholder. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "Option Closing Date"); PROVIDED,
HOWEVER, that the Option Closing Date shall not be earlier than the Closing Date
(as defined below) nor earlier than the second business day(1) after the date on
which the option shall have been exercised nor later than the tenth business day
after the date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number set forth
opposite the name of such Underwriter on Schedule A annexed hereto.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm Shares
shall be made to the Selling Stockholder by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at the offices of Xxxxxxx
Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
-----------------------
(1) As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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10019, at 10:00 A.M., New York City time, on , 2000 (unless another time shall
be agreed to by you, the Company and the Selling Stockholder or unless postponed
in accordance with the provisions of Section 10 hereof). The time at which such
payment and delivery are actually made is hereinafter sometimes called the
"Closing Date." Certificates for the Firm Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify no
later than the second business day preceding the Closing Date. For the purpose
of expediting the checking of the certificates for the Firm Shares by you, the
Selling Stockholder agrees to make such certificates available to you for such
purpose at least one full business day preceding the Closing Date.
Payment of the purchase price for the Additional Shares shall be made at the
Option Closing Date in the same manner and at the same offices as the payment
for the Firm Shares. Certificates for the Additional Shares shall be delivered
to you in definitive form in such names and in such denominations as you shall
specify no later than the second business day preceding the Option Closing Date.
For the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Selling Stockholder agrees to make such
certificates available to you for such purpose at least one full business day
preceding the Option Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDER. The Company and the Selling Stockholder, jointly and severally,
represent and warrant to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of the
Commission preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act; if the Registration Statement has become effective, no
stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or threatened by
the Commission; when the Registration Statement became effective or becomes
effective, the Registration Statement and the Prospectus fully complied or will
fully comply in all material respects with the provisions of the Act, and the
Registration Statement did not or 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, and the Prospectus did
not or 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, in light of the circumstances under which they were made,
not misleading; PROVIDED, HOWEVER, that neither the Company nor the Selling
Shareholder makes any warranty or representation with respect to any statement
contained in the Registration Statement or the Prospectus in reliance upon and
in conformity with information concerning the Underwriters and furnished in
writing by or on behalf of any Underwriter through you to the Company expressly
for use in the Registration Statement or the Prospectus; the documents
incorporated by reference in the Prospectus, at the time they were filed with
the Commission, complied in all material respects with the requirements of the
Exchange Act, and do 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 light of the circumstances under which they were made,
not misleading and the Company has not distributed any offering material in
connection
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with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other materials, if
any, permitted by the Act;
(b) as of December 31, 1999, the Company has an authorized capitalization as
set forth under the heading entitled "December 31, 1999" in the section of the
Prospectus entitled "Capitalization;" all of the issued and outstanding shares
of capital stock, including the Shares, have been duly and validly authorized
and issued and are fully paid and non-assessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of any
statutory and contractual preemptive right, resale right, right of first refusal
or similar right and are free and clear of any security interest, claim, lien or
other encumbrance;
(c) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus;
(d) the Company is duly qualified or licensed to do business as a foreign
corporation in good standing in each jurisdiction where the ownership, leasing
or operation of its properties or the conduct of its business requires such
qualification or license, except where the failure to be so qualified or
licensed would not have a material adverse effect on the business, properties,
condition (financial or otherwise) or results of operation of the Company and
its Subsidiaries (as defined below) taken as a whole (a "Material Adverse
Effect");
(e) the Company has no "significant" subsidiaries (as such term is defined
in the Act) other than NEON Securities Corp., NEON Acquisition, Inc., NEON
Communications, Inc., NorthEast Optic Network of Connecticut, Inc. and NorthEast
Optic Network of New York, Inc. (collectively, the "Subsidiaries"); the Company
owns __% of the outstanding common stock of ____________; other than the
Subsidiaries, the Company does not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture, association or
other entity; complete and correct copies of the certificates of incorporation
and of the bylaws of the Company and the Subsidiaries and all amendments thereto
have been delivered to you, and except as set forth in the exhibits to the
Registration Statement, no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date; each
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus; each Subsidiary is duly
qualified or licensed to do business as a foreign corporation in good standing
in each jurisdiction where the ownership, leasing or operation of its properties
or the conduct of its business requires such qualification or license, except
where the failure to be so qualified or licensed would not have a Material
Adverse Effect; the Company and each of its Subsidiaries are in compliance in
all material respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions; all of the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and (except as otherwise described in
this Section 3(e)) are owned by the Company free and clear of any security
interest, claim, lien or other encumbrance and were not issued in
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violation of any statutory and contractual preemptive right, resale right, right
of first refusal or similar right; no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
(f) none of the Company, any of its Subsidiaries or the Selling Stockholder
is in breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of, or constitute a
default under), its respective charter or by-laws or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, bank loan, credit agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company, any of its Subsidiaries or the Selling
Stockholder is a party or by which any of them or any of their respective
properties is bound; the execution, delivery and performance of this Agreement,
the sale of the Shares and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of time, or
both would result in any breach of, or constitute a default under), any
provisions of the charter or by-laws of the Company, any of its Subsidiaries, or
the Selling Stockholder or under any provision of any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company, any of its Subsidiaries or the Selling Shareholder is a party or by
which any of them or their respective properties may be bound or affected, or
under any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company, any of its Subsidiaries or
the Selling Shareholder;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms;
(h) the capital stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Prospectus and the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders;
(i) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required to be obtained or made by the Company or the
Selling Shareholder in connection with the sale of the Shares or the
consummation by the Company and the Selling Shareholder of the transactions as
contemplated hereby, except such as have been obtained or made under the Act or
the Exchange Act, any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD");
(j) there are no contracts, agreements or understandings between the Company
and any person granting such person (i) the right to require the Company to file
a registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered
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pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the Act,
or (ii) any preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase any of the securities of the Company other than those that
have been expressly waived prior to the date hereof;
(k) Xxxxxx Xxxxxxxx LLP, whose report on the consolidated financial
statements of the Company and its Subsidiaries is filed with the Commission as
part of the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(l) each of the Company and its Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or rule, and
has obtained all necessary authorizations, consents and approvals from other
persons, in order to conduct its respective business; neither the Company nor
any of its Subsidiaries is in violation of, or in default under, any such
license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of its Subsidiaries the effect of which could have a Material
Adverse Effect and neither the Company nor any of its Subsidiaries have received
any notice of proceeding relating to the revocation or modification of any such
license, authorization, consent or approval that, if determined adversely to the
Company or any of its Subsidiaries, could result in a Material Adverse Effect;
(m) all statutes, regulations, legal or governmental proceedings, contracts,
leases or documents of a character required to be described in the Prospectus or
to be filed as an exhibit to the Registration Statement have been so described
or filed as required;
(n) there are no actions, suits, claims, investigations or proceedings
pending, threatened, or, to the knowledge of the Company or the Selling
Stockholder, contemplated to which the Company, any of its Subsidiaries, the
Selling Stockholder or any of their respective officers is a party or of which
any of their respective properties is subject at law or in equity, or before or
by any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which (i) could result in a judgment, decree or
order having a Material Adverse Effect, (ii) would materially and adversely
affect the ability of the Company to perform its obligations contemplated
hereby, or (iii) are otherwise material in the context of the sale of the
Shares;
(o) the audited financial statements included in the Registration Statement
and the Prospectus present fairly the consolidated financial position of the
Company and its Subsidiaries as of the dates indicated and the consolidated
results of operations and cash flows of the Company and its Subsidiaries for the
periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a
consistent basis during the periods involved;
(p) subsequent to the respective dates as of which information is given in
the Prospectus, there has not been (i) any material adverse change, or any
development or event which, in the Company's reasonable judgment, is likely to
cause a material adverse change, in the business, properties or assets described
or referred to in the Prospectus or the results of operations,
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condition (financial or otherwise), business or operations of the Company and
its Subsidiaries taken as a whole, (ii) any transaction which is material to the
Company or its Subsidiaries, except transactions in the ordinary course of
business, (iii) any obligation, direct or contingent, which is material to the
Company and its Subsidiaries taken as a whole, incurred by the Company or its
Subsidiaries, except obligations incurred in the ordinary course of business,
(iv) any change in the capital stock or outstanding indebtedness of the Company
or its Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company. Neither the Company nor its
Subsidiaries has any material contingent obligation which is not disclosed in
the Prospectus;
(q) the Company has obtained the agreement of the Selling Stockholder and of
each of its directors and officers and certain of its other stockholders not to
sell, offer or agree to sell, contract to sell, pledge, hypothecate, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any other
securities that are substantially similar to Common Stock for a period of 90
days after the date of the Prospectus, without the prior written consent of
Warburg Dillon Read LLC;
(r) there are no contracts, agreements or understandings between the
Company, the Selling Stockholder, and any person that would give rise to a valid
claim against the Company, the Selling Stockholder or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with sale
of Shares contemplated hereby;
(s) the Company and its Subsidiaries have good and marketable title to all
real properties and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof by them;
except as disclosed in the Prospectus, the Company and its Subsidiaries hold any
leased real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company and its
Subsidiaries hold easements, indefeasible rights of use and rights-of-way under
valid and enforceable agreements with no exceptions that would materially
interfere with the use made or to be made thereof by them;
(t) no labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company or the Selling
Shareholder, is imminent that might have a material adverse effect on the
Company and its Subsidiaries taken as a whole;
(u) the Company and its Subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its Subsidiaries, could individually or in
the aggregate reasonably be expected to have a Material Adverse Effect;
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(v) neither the Company nor any of its Subsidiaries (i) is in violation of
any statute, rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), (ii) owns or operates any real property
contaminated with any substance that is subject to any environmental laws, (iii)
is liable for any off-site disposal or contamination pursuant to any
environmental laws, or (iv) is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim could
individually or in the aggregate reasonably be expected to have a Material
Adverse Effect and neither the Company nor the Selling Shareholder is aware of
any pending investigation which might lead to such a claim;
(w) neither the Company nor the Selling Shareholder is currently and, after
giving effect to the sale of the Shares will be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(x) except as disclosed in the Prospectus, neither the Company nor any of
its Subsidiaries are currently, nor will the conduct of their business as
described in Prospectus cause any of them to be in the future, subject to the
provisions of the Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (the "Communications Act") or to any rules,
regulations and policies of the Federal Communications Commission (the "FCC")
related thereto; and
(y) the Company and its Subsidiaries are in compliance in all material
respects with all federal, state and local telecommunications laws, rules,
regulations and policies to which they are subject, including, with respect to
the Subsidiaries, the Communications Act and the related rules, regulations and
policies of the FCC.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDER. The Selling
Stockholder represents and warrants to each Underwriter that:
(a) the Selling Stockholder has been duly organized and is validly existing
as a business trust under the laws of the Commonwealth of Massachusetts, with
full corporate power and authority to enter into the transactions contemplated
hereunder;
(b) the Selling Stockholder now is and at the time of delivery of such
Shares (whether the Closing Date or the Option Closing Date, as the case may be)
will be, the lawful owner of the number of Shares to be sold by the Selling
Stockholder pursuant to this Agreement and has and, at the time of delivery
thereof, will have valid and marketable title to such Shares, and upon delivery
of and payment for such Shares (whether at the Closing Date or the Option
Closing Date, as the case may be), the Underwriters will acquire valid and
marketable title to such Shares free and clear of any claim, lien, encumbrance,
security interest, community property right, restriction on transfer or other
defect in title;
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(c) the Selling Stockholder has and at the time of delivery of such Shares
(whether the Closing Date or the Option Closing Date, as the case may be) will
have, full legal right, power and authority, and any approval required by law
(other than those imposed by the Act and the securities or blue sky laws of
certain jurisdictions), to sell, assign, transfer and deliver such Shares in the
manner provided in this Agreement;
(c) this Agreement has been duly authorized, executed and delivered by the
Selling Stockholder and is a legal, valid and binding agreement of the Selling
Stockholder enforceable in accordance with its terms;
(d) the sale of the Shares pursuant to this Agreement is not prompted by any
information concerning the Company which is not set forth in the Prospectus; and
the Selling Shareholder has not taken and will not take, directly or indirectly,
any action designed to, or that might reasonably be expected to, cause or result
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares pursuant to the distribution
contemplated by this Agreement, and other than as permitted by the Act, the
Selling Shareholder has not distributed and will not distribute, prior to
completion of the distribution of the Shares, any prospectus or other offering
material in connection with the offering and sale of the Shares; and
(e) except as set forth in the Selling Shareholder questionnaire signed by
the Selling Shareholder and delivered to the Underwriters, such Selling
Shareholder is neither a member of the NASD nor "affiliated" with nor a "person
associated with" such a member as contemplated by the rules of the NASD.
5. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees with the
Underwriters and the Selling Shareholder:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
PROVIDED, HOWEVER, the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver a
prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare promptly
upon request, but at the expense of such Underwriter,
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such amendment or amendments to the Registration Statement and such prospectuses
as may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such advice
in writing, (i) when the Registration Statement has become effective and when
any post-effective amendment thereto becomes effective and (ii) if Rule 430A
under the Act is used, when the Prospectus is filed with the Commission pursuant
to Rule 424(b) under the Act (which the Company agrees to file in a timely
manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference and to file no such amendment or supplement to which you shall object
in writing;
(e) to file promptly all reports and any definitive proxy or information
statement required to be filed by the Company with the Commission in order to
comply with 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, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement pursuant
to Rule 462(b) under the Act; (g) to furnish to you promptly and, upon request,
to each of the other Underwriters for a period of three years from the date of
this Agreement (i) copies of any reports or other communications which the
Company shall send to its stockholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
form as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you may
reasonably request regarding the Company or its Subsidiaries, which such other
information shall be kept confidential by the Underwriters;
(h) to advise the Underwriters and the Selling Stockholder promptly of the
happening of any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under the Act
which, in the judgment of the Company, would require the making of any change in
the Prospectus then being used, or in the information incorporated therein by
reference, so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, and, during such time, to prepare and furnish, at the Company's
expense, to the Underwriters promptly such
10
amendments or supplements to such Prospectus as may be necessary to reflect any
such change and to furnish you a copy of such proposed amendment or supplement
before filing any such amendment or supplement with the Commission;
(i) to make generally available to its security holders, and to deliver to
you, an earning statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning after the
effective date of the Registration Statement (as defined in Rule 158(c) of the
Act) as soon as is reasonably practicable after the termination of such
twelve-month period but not later than the Availability Date. For the purpose of
the preceding sentence, "Availability Date" means the 45th day after the end of
the fourth fiscal quarter following the fiscal quarter in which the Registration
Statement became effective, except that, if such fourth fiscal quarter is the
last quarter of the Company's fiscal year, "Availability Date" means the 90th
day after the end of such fourth fiscal quarter;
(j) to furnish to its shareholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, shareholders' equity and of cash flow of the Company for such fiscal
year, accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants;
(k) to furnish to you three signed copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to the Closing Date and
the Option Closing Date, as the case may be, but not later than two business
days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of the Company and its Subsidiaries
which have been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 8(c) hereof;
(m) not to issue, sell, offer or agree to sell, contract to sell, pledge,
hypothecate, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock or permit the registration under the Act
of any shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options, warrants and debentures,
for a period of 90 days after the date of the Prospectus, without the prior
written consent of Warburg Dillon Read LLC; and
(n) to use its best efforts to maintain the listing of the Common Stock on
the Nasdaq Stock Market's National Market.
6. CERTAIN COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDER. The Company
and the Selling Stockholder agree with each Underwriter as follows:
11
(a) the Company will pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters except
as set forth under Section 7 hereof , (iii) or (iv) below or Section 6(b)) in
connection with (i) the preparation and filing of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
sale and delivery of the Shares by the Selling Stockholder, (iii) the word
processing and/or printing of this Agreement, any Agreement Among Underwriters,
any dealer agreements, any Statements of Information and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel to the Underwriters) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) listing of the Shares
on the Nasdaq Stock Market's National Market and any registration thereof under
the Exchange Act, (vi) the filing for review of the public offering of the
Shares by the NASD, and (vii) the performance of the Company's and the Selling
Stockholder's other obligations hereunder;
(b) the Selling Stockholder will pay, or reimburse the Company for, the
following expenses: (i) one hundred percent (100%) of the Company's
out-of-pocket expenses incurred in connection with the road show, (ii)
seventy-five percent (75%) of the Company's legal fees and expenses related to
the preparation of the Registration Statement, (iii) fifty percent (50%) of the
expenses incurred in conniption with the printing of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and fifty percent (50%) of the accounting fees incurred in connection
with the Registration Statement; PROVIDED HOWEVER, that in no event will the
Selling Stockholder be required to pay to or reimburse the Company an amount
that exceeds in the aggregate $575,000.
(c) the Selling Shareholder agrees to pay or cause to be paid all taxes, if
any, on the transfer and sale of the Shares;
(d) the Selling Stockholder agrees to deliver to Warburg Dillon Read LLC on
or prior to the Closing Date 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); and
(e) the Selling Stockholder agrees, and will cause each of its trustees to
agree, not to sell, offer or agree to sell, contract to sell, pledge,
hypothecate, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities that are substantially similar to
Common Stock for a period of 90 days after the date of the Prospectus, without
the prior written consent of Warburg Dillon Read LLC; [PROVIDED HOWEVER, the
Selling Stockholder may, upon notification to Xxxxxxx Xxxxxxx Read LLC, sell,
agree to sell or contract to sell any of its shares of Common Stock to Northeast
Utilities or Central Maine Power Company].
12
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not delivered
for any reason other than the termination of this Agreement pursuant to the
first two paragraphs of Section 10 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 6(a) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder on the date
hereof and at the Closing Date (and the several obligations of the Underwriters
at the Option Closing Date are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholder on the
date hereof and at the Closing Date (unless previously waived) and at the Option
Closing Date, as the case may be), the performance by the Company and the
Selling Stockholder of their obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the Closing Date and at the Option
Closing Date, as the case may be, an opinion of Xxxx and Xxxx LLP, counsel for
the Company, addressed to the Managing Underwriters, and dated the Closing Date
or the Option Closing Date, as the case may be, with reproduced copies for each
of the other Underwriters and in form satisfactory to Xxxxxxx Xxxx & Xxxxxxxxx,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Prospectus;
(ii) each of the Subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its respective
jurisdiction of incorporation with full corporate power and authority to
own, lease and operate its respective properties and to conduct its
respective business as described in the Prospectus;
(iii) the Company and its Subsidiaries are duly qualified or licensed
to do business as a foreign corporation by each jurisdiction in which they
conduct their respective businesses and in which the failure, individually
or in the aggregate, to be so qualified or licensed could have a Material
Adverse Effect and the Company and its Subsidiaries are duly qualified or
licensed, and are in good standing, in each jurisdiction in which they own
or lease real property or maintain an office and in which such qualification
or license is necessary; the Company and each of its Subsidiaries are in
compliance in all material respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions;
(iv) this Agreement has been duly authorized, executed and delivered by
the Company;
13
(v) the Shares have been duly authorized and, when issued and delivered
to the Underwriters, will be duly and validly authorized and issued and are
fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set forth in the
Prospectus; the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued, and are fully paid, non-assessable
and have been issued in compliance with all federal and state securities
laws; the Shares when issued will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar rights
and the Shares are free and clear of any security interest, claim, lien or
other encumbrance; the certificates for the Shares are in due and proper
form and the holders of the Shares will not be subject to personal liability
by reason of being such holders;
(vii) other than the Subsidiaries, the Company does not own or control,
directly or indirectly, any corporation, association or other entity; all of
the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and non-assessable
and, except as otherwise stated in the Prospectus, are owned by the Company,
free and clear of any security interest, claim, lien or other encumbrance
and were not issued in violation of any statutory and contractual preemptive
right, resale right, right of first refusal or similar right; no options,
warrants or other rights to purchase, agreements or other obligations to
issue or other rights to convert any obligation into shares of capital stock
or ownership interests in the Subsidiaries are outstanding;
(viii) the capital stock of the Company, including the Shares, conforms
to the description thereof contained in the Prospectus;
(ix) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act;
(x) the Registration Statement has become effective under the Act and,
to the best of such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any required
filing of the Prospectus and any supplement thereto pursuant to Rule 424
under the Act has been made in the manner and within the time period
required by such Rule 424;
(xi) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required to be obtained or made
14
by the Company in connection with the sale of the Shares and consummation by
the Company of the transactions as contemplated hereby, except such as have
been obtained or made under the Act or the Exchange Act (except such counsel
need express no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in which the Shares
are being offered by the Underwriters or under the rules and regulations of
the NASD);
(xii) the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both, would result in any breach of or constitute a
default under), any provisions of the charter or by-laws of the Company or
any of its Subsidiaries or under any provision of any license, indenture,
mortgage, deed of trust, bank loan, credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its Subsidiaries;
(xiii) to the best of such counsel's knowledge, neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or is in
breach of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach of, or constitute
a default under), any license, indenture, mortgage, deed of trust, bank
loan, credit agreement or other evidence of indebtedness, or any lease,
contract or any other agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable
to the Company or any of its Subsidiaries;
(xiv) to the best of such counsel's knowledge, there are no statutes,
regulations, contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus which have not
been so filed, summarized or described;
(xv) to the best of such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Company, any of its Subsidiaries or any of their
respective officers is subject or of which any of their respective
properties is subject at law or in equity or before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency which are required to be described in the Prospectus but
are not so described;
(xvi) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed) with
the Commission,
15
complied as to form in all material respects with the Exchange Act (except
as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein as to which
such counsel need express no opinion);
(xvii) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or a "promoter"
or "principal underwriter" for, a "registered investment company," as such
terms are defined in the Investment Company Act of 1940, as amended;
(xviii) there are no contracts, agreements or understandings between
the Company and any person granting such person (i) the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered pursuant
to the Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Company under the Act, or
(ii) any statutory and contractual preemptive rights, co-sale rights, rights
of first refusal or other rights to purchase any of the securities of the
Company other than those that have been expressly waived prior to the date
hereof;
(xix) the statements in the Prospectus under the captions "Prospectus
Summary -- Recent Developments," "Risk Factors -- The expansion of our
network in New York City requires regulatory approval, which has encountered
delays," "Risk Factors -- Each of our agreements with Consolidated Edison
Communications and Exelon Corporation are subject to possible termination if
the closing under that agreement does not occur by June 9, 2000," "Risk
Factors -- RISKS RELATING TO OUR RIGHTS-OF-WAY," "Risk Factors -- RISKS
RELATING TO GOVERNMENT REGULATION," "Business -- RIGHTS-OF-WAY AGREEMENTS,"
"Business -- "CONSOLIDATED EDISON COMMUNICATIONS AGREEMENT AND EXELON
CORPORATION AGREEMENT," "Business -- GOVERNMENTAL REGULATION" and "Principal
and Selling Stockholders -- Agreement with Principal Stockholders" insofar
as they constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly summarize the
matters referred to therein; and
(xx) such counsel have participated in conferences with officers and
other representatives of the Company, counsel for the Selling Stockholder,
officers and other representatives of the Selling Stockholder,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (vi) and (viii) above), on the basis of the foregoing, nothing
16
has come to the attention of such counsel that causes them to believe that
the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement thereto at the date of
such Prospectus or such supplement, and at all times up to and including the
Closing Date or the Option Closing Date, as the case may be, 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,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to
the financial statements and schedules and other financial and statistical
data included in the Registration Statement or Prospectus).
(b) You shall have received at the Closing Date and at the Option Closing
Date, as the case may be, an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, regulatory counsel for the Company, addressed to the Managing
Underwriters, and dated the Closing Date or the Option Closing Date, as the case
may be, with reproduced copies for each of the other Underwriters and in the
form satisfactory to Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters,
stating that:
(i) the statements in the Prospectus under the captions "Risk
Factors--- RISKS RELATING TO GOVERNMENT REGULATION" and "Business --
REGULATION", insofar as they constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(ii) notwithstanding the fact that the Company conducts its business
as, depending on the circumstances, either (a) an unregulated provider of
fiber capacity, or (b) a provider of telecommunications, as that term is
defined in the Communications Act of 1934, as amended, the Company has the
legal right to obtain access to all poles, ducts, conduits, and
rights-of-way that it needs to construct and operate its network;
(iii) the Company has obtained all regulatory licenses, certificates,
permits, and authorizations, if any, required by the FCC and any state
regulatory agency with direct regulatory jurisdiction over
telecommunications in the state in which the Company currently offers fiber
capacity ("State Regulatory Agency"), for the provision of
telecommunications, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such license,
certificate, permit, or authorization; and
(iv) to the best of such counsel's knowledge, the Company is not in
violation of, or in default under, any provision of the Communications Act
of 1934, as amended, any rule or regulation of the FCC, any statutory
provision for
17
which a State Regulatory Agency has enforcement responsibility, any State
Regulatory Agency rule or regulation, or any municipal rule or regulation,
the effect of which, singly or in the aggregate, would have a material
adverse effect on the Company.
(c) The Selling Stockholder shall furnish to you at the Closing Date and at
the Option Closing Date, as the case may be, an opinion of Xxxxxxxx Berlin
Shereff Xxxxxxxx, LLP, counsel for the Selling Stockholder, addressed to the
Managing Underwriters, and dated the Closing Date or the Option Closing Date, as
the case may be, with reproduced copies for each of the other Underwriters, and
in form and substance satisfactory to Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the
Underwriters, stating that:
(i) the Selling Stockholder has been duly organized and is validly
existing as a business trust under the laws of the Commonwealth of
Massachusetts, with full corporate power and authority to enter into the
transactions contemplated hereunder;
(ii) this Agreement has been duly executed and delivered by or on
behalf of the Selling Stockholder;
(iii) the Selling Stockholder has full legal right and power, and has
obtained any authorization or approval required by law (other than those
imposed by the Act and the securities or blue sky laws of certain
jurisdictions), to sell, assign, transfer and deliver the Shares in the
manner provided in this Agreement;
(iv) delivery of certificates for the Shares by the Selling Stockholder
pursuant hereto will pass valid and marketable title thereto to the
Underwriters, free and clear of any claim, lien, encumbrance, security
interest, community property right, restriction on transfer or other defect
in title;
(v) to the best of such counsel's knowledge, the statements in the
Prospectus under the caption "Principal and Selling Stockholders" insofar as
such statements constitute a summary of the matters referred to therein
present fairly the information called for with respect to such matters;
(vi) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required to be obtained or made by the Selling
Stockholder in connection with the sale of the Shares and consummation by
the Selling Stockholder of the transactions as contemplated hereby, except
such as have been obtained or made under the Act or the Exchange Act (except
such counsel need express no opinion as to any necessary qualification under
the state securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriters or under the rules and
regulations of the NASD);
(vii) the execution, delivery and performance of this Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of the
18
transactions contemplated hereby do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both, would result in any breach
of or constitute a default under), any provisions of the charter or by-laws
of the Selling Stockholder or under any provision of any license, indenture,
mortgage, deed of trust, bank loan, credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Selling Stockholder is a party or by which its properties may be
bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Selling Shareholder;
(viii) to the best of such counsel's knowledge, the Selling Stockholder
is not in violation of its charter or by-laws or is in breach of, or in
default under (nor has any event occurred which with notice, lapse of time,
or both would result in any breach of, or constitute a default under), any
license, indenture, mortgage, deed of trust, bank loan, credit agreement or
other evidence of indebtedness, or any lease, contract or any other
agreement or instrument to which the Selling Stockholder is a party or by
which its properties may be bound or affected or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Selling Stockholder;
(ix) to the best of such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Selling Stockholder or any of its respective
officers is subject or of which its properties is subject at law or in
equity or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which are required
to be described in the Prospectus but are not so described; and
(x) such counsel have participated in conferences with officers and
other representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the Underwriters at
which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus, on the basis of the
foregoing, nothing has come to the attention of such counsel that causes
them to believe that the Registration Statement or any amendment thereto at
the time such Registration Statement or amendment became effective contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus or any supplement thereto at the date
of such Prospectus or such supplement, and at all times up to and including
the Closing Date or the Option Closing Date, as the case may be, 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,
in light of the circumstances under which they were made, not misleading (it
being understood
19
that such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data included
in the Registration Statement or Prospectus).
(d) You shall have received from Xxxxxx Xxxxxxxx LLP, letters dated,
respectively, the date of this Agreement and the Closing Date and the Option
Closing Date, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by Warburg Dillon Read LLC.
(e) You shall have received at the Closing Date and at the Option
Closing Date, as the case may be, the opinion of Xxxxxxx Xxxx & Xxxxxxxxx,
counsel for the Underwriters, dated the Closing Date or the Option Closing Date,
as the case may be, as to the matters referred to in subparagraphs (iv), (v),
(viii) (with respect to the Shares only), (ix) and (x) of paragraph (a) of this
Section 8.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, counsel for the Selling Stockholder,
officers and other representatives of the Selling Stockholder,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to matters
referred to with respect to the Shares under subparagraph (viii) of
paragraph (a) of this Section 8), on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Company), no facts have come to the attention of such
counsel which lead them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its date
or any supplement thereto as of its date 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, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(f) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(g) The Registration Statement shall become effective, or if Rule 430A
under the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New York City
time, on the date of this Agreement, unless a later time (but not later than
5:00 P.M., New York City time, on the second full business
20
day after the date of this Agreement) shall be agreed to by the Company, the
Selling Stockholder and you in writing or by telephone, confirmed in writing;
PROVIDED, HOWEVER, that the Company, the Selling Stockholder and you and any
group of Underwriters, including you, who have agreed hereunder to purchase in
the aggregate at least 50% of the Firm Shares may from time to time agree on a
later date.
(h) Prior to the Closing Date or the Option Closing Date, as the case
may be, (i) no stop order with respect to the effectiveness of the Registration
Statement shall have been issued under the Act or proceedings initiated under
Section 8(d) or 8(e) of the Act; (ii) the Registration Statement and all
amendments thereto, or modifications thereof, if any, shall 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;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall 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 are made, not misleading.
(i) Between the time of execution of this Agreement and the Closing
Date or the Option Closing Date, as the case may be, (i) no material and
unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition or prospects
of the Company and its Subsidiaries taken as a whole shall occur or become known
and (ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of its Subsidiaries.
(j) The Company will, at the Closing Date or the Option Closing Date,
as the case may be, deliver to you a certificate of two of its executive
officers to the effect that the representations and warranties of the Company as
set forth in this Agreement are true and correct as of each such date, that the
Company shall perform such of its obligations under this Agreement as are to be
performed at or before the Closing Date or the Option Closing Date, as the case
may be, and the conditions set forth in paragraphs (h) and (i) of this Section 8
have been met.
(k) You shall have received signed letters, dated the date of this
Agreement, from the Selling Stockholder and each of the directors and officers
of the Company and certain of its other stockholders to the effect that such
persons shall not sell, offer or agree to sell, contract to sell, grant any
option to sell, pledge, hypothecate or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to the Common Stock for a period of 90 days after the date
of the Prospectus without prior written consent of Warburg Dillon Read LLC.
(l) The Company and the Selling Stockholder shall have furnished to you
such other documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the Closing
Date and the Option Closing Date, as the case may be, as you may reasonably
request.
21
(m) The Company shall maintain the listing of the Common Stock on the
Nasdaq Stock Market's National Market.
(n) The Selling Stockholder will at the, Closing Date or the Option
Closing Date, as the case may be, deliver to you a certificate of the Selling
Stockholder to the effect that the representations and the warranties of the
Selling Stockholder as set forth in this Agreement are true and correct as of
each such date.
(o) If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Managing Underwriters by notice to the Company and the Selling
Stockholder at any time at or prior to the Closing Date or the Option Closing
Date, as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 7 and except that
Sections 3, 4 and 11 shall survive any such termination and remain in full force
and effect.
9. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (y) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company and its Subsidiaries taken as a whole, which would, in your judgment or
in the judgment of such group of Underwriters, make it impracticable to market
the Shares, or (z) there shall have occurred any downgrading, or any notice
shall have been given of (i) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Act or, if, at any time prior to the Closing Date
or, with respect to the purchase of any Additional Shares, the Option Closing
Date, as the case may be, trading in securities on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market shall have been
suspended or limitations or minimum prices shall have been established on the
New York Stock Exchange, the American Stock Exchange or the NASDAQ National
Market or if a banking moratorium shall have been declared either by the United
States or New York State authorities, or if the United States shall have
declared war in accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the judgment
of such group of Underwriters, to make it impracticable to market the Shares.
22
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 9, the Company, the Selling Stockholder and each
other Underwriter shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholder, as the case may be, shall be unable to comply with any of
the terms of this Agreement, the Company or the Selling Stockholder, as the case
may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholder under this Agreement (except to the extent provided in
Section 11 hereof) or to one another hereunder.
10. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 8 and 9,
if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 9 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Firm Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Firm Shares shall be taken up and paid for by all non-defaulting
Underwriters pro rata in proportion to the aggregate number of Firm Shares set
opposite the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and the Selling Stockholder agree with the non-defaulting
Underwriters that they will not sell any Firm Shares hereunder unless all of the
Firm Shares are purchased by the Underwriters (or by substituted Underwriters
selected by you with the approval of the Company or selected by the Company with
your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the Closing Date for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting Underwriter
or Underwriters agreed to purchase exceeds 10% of the total number of Firm
Shares which all Underwriters
23
agreed to purchase hereunder, and if neither the non-defaulting Underwriters nor
the Company shall make arrangements within the five business day period stated
above for the purchase of all the Firm Shares which the defaulting Underwriter
or Underwriters agreed to purchase hereunder, this Agreement shall be terminated
without further act or deed and without any liability on the part of the Company
and the Selling Stockholder to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company and the
Selling Stockholder. Nothing in this paragraph, and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
11. INDEMNITY AND CONTRIBUTION.
(a) The Company and the Selling Stockholder jointly and severally agree
to indemnify, defend and hold harmless each Underwriter, its partners, directors
and officers, and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the Common Law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 11 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter through you
to the Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in either such Registration Statement or
Prospectus or necessary to make such information not misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company or the Selling Stockholder pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Company and
the Selling Stockholder in writing of the institution of such Proceeding and the
Company or the Selling Stockholder, as the case may be, shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; PROVIDED,
HOWEVER, that the omission to so notify the Company or the Selling Stockholder
shall not relieve the Company or the Selling Stockholder from any liability
which the Company or the Selling Stockholder may have to any Underwriter or any
such person or otherwise. Such Underwriter or such controlling person shall have
the right to employ its or their own counsel in any such case, but the fees and
24
expenses of such counsel shall be at the expense of such Underwriter or of such
person unless the employment of such counsel shall have been authorized in
writing by the Company or the Selling Stockholder in connection with the defense
of such Proceeding or the Company or the Selling Stockholder shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company or the Selling Stockholder (in which case
the Company or the Selling Stockholder shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company or the
Selling Stockholder, as the case may be, and paid as incurred (it being
understood, however, that the Company or the Selling Stockholder shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company or the Selling Stockholder shall not be liable for any
settlement of any such Proceeding effected without its written consent, but if
settled with the written consent of the Company or the Selling Stockholder, the
Company or the Selling Stockholder agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, the Selling Stockholder and
its directors and officers and any person who controls the Company or the
Selling Stockholder within the meaning of Section 15 of the Act, or Section 20
of the Exchange Act from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company, the Selling Stockholder or any such person may incur
under the Act, the Exchange Act, or Common Law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by or on behalf of any
25
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in such
Registration Statement or Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company, the Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company, the
Selling Stockholder or such person shall promptly notify such Underwriter in
writing of the institution of such Proceeding and such Underwriter shall assume
the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
PROVIDED, HOWEVER, that the omission to so notify such Underwriter shall not
relieve such Underwriter, from any liability which such Underwriter may have to
the Company, the Selling Stockholder or any such person or otherwise. The
Company, the Selling Stockholder or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of the Company, the Selling Stockholder or such person
unless the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such Underwriter
(in which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that such Underwriter shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company, the Selling Stockholder and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding.
26
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 11 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other hand from the offering of the Shares or
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand and of the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Stockholder and the total
underwriting discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of the Company
and the Selling Stockholder on the one hand and of the Underwriters on the other
shall be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company, by the Selling
Stockholder or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating, preparing to defend or defending
any claim or Proceeding.
(d) The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
11 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 that does
not take account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 11, 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 such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement 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 to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section
11 and the covenants, warranties and representations of the Company and the
Selling Stockholder contained in this Agreement shall remain in full force and
effect regardless of any investigation
27
made by or on behalf of any Underwriter, its directors and officers or any
person (including each officer or director of such person) who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of the Company, its directors or officers, the
Selling Stockholder or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company, each Selling Stockholder and each Underwriter agree promptly to notify
each other commencement of any Proceeding against it and, in the case of the
Company, against any of the Company's officers or directors in connection with
the sale of the Shares, or in connection with the Registration Statement or
Prospectus.
12. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if
to the Underwriters, shall be sufficient in all respects if delivered or sent
to Warburg Dillon Read LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000,
Attention: Syndicate Department, if to the Company, shall be sufficient in
all respects if delivered or sent to the Company at the offices of the
Company at 0000 Xxxx Xxxx Xxxxx, Xxxxxxxxxxx, XX 00000, Attention:
_____________ and, if to the Selling Stockholder, shall be sufficient in all
respects if delivered or sent to the Selling Stockholder at
[41 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000], Attention: _________________.
13. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
14. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company and the
Selling Stockholder consent to the jurisdiction of such courts and personal
service with respect thereto. The Company and the Selling Stockholder hereby
consent to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any
third party against Warburg Dillon Read LLC or any indemnified party. Each of
Warburg Dillon Read LLC, the Company (on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates) and the Selling
Stockholder waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company and the Selling Stockholder
agree that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Company and
the Selling Stockholder and may be enforced in any other courts in the
jurisdiction of which the Company or the Selling Stockholder is or may be
subject, by suit upon such judgment.
15. PARTIES AT INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Selling
Stockholder and to the extent
28
provided in Section 11 hereof the controlling persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
pursuant representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
16. COUNTERPARTS. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
17. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Company, the Selling Stockholder and their successors and
assigns and any successor or assign of any substantial portion of the Company's,
the Selling Stockholder's and any of the Underwriters' respective businesses
and/or assets.
18. [MISCELLANEOUS. Warburg Dillon Read LLC, an indirect, wholly owned
subsidiary of [ ], is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of Warburg Dillon Read LLC. Because Warburg
Dillon Read LLC is a separately incorporated entity, it is solely responsible
for its own contractual obligations and commitments, including obligations with
respect to sales and purchases of securities. Securities sold, offered or
recommended by Warburg Dillon Read LLC are not deposits, are not insured by the
Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency,
and are not otherwise an obligation or responsibility of a branch or agency.]
[A lending affiliate of Warburg Dillon Read LLC may have lending
relationships with issuers of securities underwritten or privately placed by
Warburg Dillon Read LLC. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by Warburg Dillon Read LLC will disclose the existence of any
such lending relationships and whether the proceeds of the issue will be used to
repay debts owed to affiliates of Warburg Dillon Read LLC.]
29
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholder and the Underwriters, please so indicate in the
space provided below for the purpose, whereupon this letter and your acceptance
shall constitute a binding agreement among the Company, the Selling Stockholder
and the Underwriters, severally.
Very truly yours,
NORTHEAST OPTIC NETWORK, INC.
By:
--------------------------
Title:
NEW ENGLAND BUSINESS TRUST
By:
--------------------------
Accepted and agreed to as of the date first above
written, on behalf of themselves and the other
several Underwriters named in Schedule A
WARBURG DILLON READ LLC
CREDIT SUISSE FIRST BOSTON
By: WARBURG DILLON READ LLC
By:
--------------------------
Title:
By:
--------------------------
Title:
30
SCHEDULE A
Number of
UNDERWRITER FIRM SHARES
----------- -----------
WARBURG DILLON READ LLC
CREDIT SUISSE FIRST BOSTON
---------
Total.................... 3,000,000
=========
