Exhibit 1.2
SONUS NETWORKS, INC.
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FORM OF UNDERWRITING AGREEMENT (DEBT)
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Ladies and Gentlemen:
Sonus Networks, Inc., a Delaware corporation (the "COMPANY"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "UNDERWRITERS") an aggregate of
$[___________] principal amount of _____________ (the "FIRM SECURITIES") and, at
the election of the Underwriters, up to an aggregate of $[___________]
additional aggregate principal amount (the "OPTIONAL SECURITIES") (the Firm
Securities and the Optional Securities which the Underwriters may elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"SECURITIES").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-....)
(the "INITIAL REGISTRATION STATEMENT") in respect of the Securities has
been filed with the Securities and Exchange Commission (the
"COMMISSION"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you
for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "RULE 462(b) REGISTRATION
STATEMENT"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "ACT"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (the form of
prospectus to be used in connection with the issuance and sale of the
Securities included in the Initial Registration Statement is
hereinafter called the "BASIC PROSPECTUS"; the form of prospectus
supplement included in the Initial Registration Statement is hereby
called the "PROSPECTUS SUPPLEMENT"; the Basic Prospectus, as
supplemented by the Prospectus Supplement, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b) under the
Act, is hereinafter called the "PROSPECTUS"; any preliminary prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "PRELIMINARY
PROSPECTUS"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the
Prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule
430A under the Act to be part of the Initial Registration Statement at
the time it was declared effective and (ii) the documents incorporated
by reference in the Prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "REGISTRATION STATEMENT"; any
reference herein to the Registration Statement, Basic Prospectus,
Prospectus Supplement, Preliminary Prospectus or Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Registration Statement, Basic Prospectus, Prospectus
Supplement, Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to the Registration
Statement, Basic Prospectus, Prospectus Supplement, Preliminary
Prospectus or Prospectus shall be deemed to refer to and include any
documents filed after the date of such Registration Statement, Basic
Prospectus, Prospectus Supplement, Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), and incorporated by reference in
such Registration Statement, Basic Prospectus, Prospectus Supplement,
Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through expressly for use
therein;
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
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regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through expressly for use
therein;
(e) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the rules and regulations
thereunder which have not been described or filed as required; the
contracts so described in the Prospectus to which the Company or any of
its subsidiaries is a party have been duly authorized, executed and
delivered by the Company and its subsidiaries, as are party thereto,
constitute valid and binding agreements of the Company and its
subsidiaries, as are party thereto, are enforceable against the Company
and its subsidiaries, as are party thereto, in accordance with their
respective terms and are in full force and effect on the date hereof;
to the best of the Company's knowledge, the contracts so described in
the Prospectus to which the Company or any of its subsidiaries is a
party are enforceable by the Company and its subsidiaries, as are party
thereto, against the other parties thereto in accordance with their
respective terms; and neither the Company nor any of its subsidiaries,
nor, to the best of the Company's knowledge, any other party is in
breach of or default under any of such contracts, except for such
breaches or defaults that, singly or in the aggregate, would not result
in a material adverse change in or affecting the business, assets,
management, financial condition or results of operations of the Company
and its subsidiaries taken as a whole;
(f) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus; and, since the
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respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock (other than issuances of shares of common stock, $0.001
par value per share (the "STOCK"), pursuant to Company stock option,
stock incentive or stock purchase plans described in the Registration
Statement and Prospectus or in connection with the acquisition of
telecom technologies, inc. ("TTI"), as described in the Registration
Statement and Prospectus) or long-term debt (other than as described in
the Registration Statement and Prospectus) of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
business, assets, management, financial position, or results of
operations of the Company and its subsidiaries, taken as a whole;
(g) None of the Company and its subsidiaries owns any real
property; each of the Company and its subsidiaries has good and
marketable title to all personal property owned by it, free and clear
of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company or any of its
subsidiaries are held under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company and its subsidiaries; the Company and its subsidiaries own or
lease all such properties as are necessary to their operations as now
conducted, except where the failure to so own or lease would not,
singly or in the aggregate, result in a material adverse change in or
affecting the business, assets, management, financial condition or
results of operations of the Company and its subsidiaries taken as a
whole;
(h) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of organization, each with full
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(i) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims except
such as are described in the Prospectus; except as disclosed in or
contemplated by the Prospectus and the consolidated financial
statements of the Company, and the related notes thereto, included in
the Prospectus, neither the Company nor any subsidiary has outstanding
any options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations; and the description of the Company's stock option and
stock purchase plans and the options or other rights granted and
exercised thereunder set forth in the Prospectus
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accurately and fairly presents the information required to be shown
with respect to such plans, options and rights;
(j) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the indenture dated as of __________, _____ (the
"INDENTURE") between the Company and The Bank of New York, as Trustee
(the "TRUSTEE"), under which they are to be issued, which is
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; the Securities and the
Indenture will conform to the descriptions thereof in the Prospectus;
and no preemptive rights or other rights to subscribe for or purchase
exist with respect to the issuance and sale of the Securities by the
Company pursuant to this Agreement;
(k) The Company has full corporate power and authority to enter
into this Agreement; this Agreement has been duly authorized, executed
and delivered by the Company, constitutes a valid and binding
obligation of the Company and is enforceable against the Company in
accordance with its terms;
(l) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture
and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
filing, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except the
registration under the Act of the Securities, such as have been
obtained under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(m) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound except for
such violations or defaults that would not, singly or in the aggregate,
result in a material adverse change in or effect on the business,
assets,
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management, financial position or results of operations of the Company
and its subsidiaries taken as a whole;
(n) The statements set forth in the Prospectus under the caption
"Description of Notes", insofar as they purport to constitute a summary
of the terms of the Securities, under the caption "Certain United
States Federal Income Tax Considerations" and under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(o) Other than as set forth in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending or, to the
best of the Company's knowledge, threatened to which the Company or any
of its subsidiaries is or may be a party or of which any property owned
or leased by the Company or any of its subsidiaries is or may be the
subject, which actions, suits or proceedings are required to be
described in the Registration Statement by the Act or the rules and
regulations thereunder or which might, singly or in the aggregate,
prevent or adversely affect the transactions contemplated by this
Agreement or result in a material adverse change in or affecting the
business, assets, management, financial position (after giving effect
to the offering of the Securities) or results of operations of the
Company and its subsidiaries taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or others; no labor disturbance by the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent which might be expected to affect
adversely the business, assets, management, financial position or
results of operations of the Company and its subsidiaries taken as a
whole; and neither the Company nor any of its subsidiaries is a party
or subject to the provisions of any injunction, judgment, decree or
order of any court, regulatory body, administrative agency or other
governmental body;
(p) The Company is not and, after giving effect to the offering
and sale of the Securities, will not 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");
(q) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(r) The Company and its subsidiaries possess all licenses,
certificates, authorizations or permits issued by the appropriate
governmental or regulatory agencies or authorities that are necessary
to enable them to own, lease and operate their respective properties
and to carry on their respective businesses as currently conducted and
which are material to the Company and its subsidiaries, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
license, certificate, authorization or permit which, singly or in the
aggregate, would be expected to materially and adversely affect the
business, assets, management, financial position or results of
operations of the Company and its subsidiaries taken as a whole;
(s) The consolidated financial statements and schedules of the
Company and of TTI, and the related notes thereto, included in the
Registration Statement and the Prospectus
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present fairly in all material respects the financial position of the
Company and TTI, respectively as of the respective dates of such
financial statements and schedules, and the results of operations and
cash flows of the Company and TTI, respectively for the respective
periods covered thereby; such statements, schedules and related notes
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis as certified by the
independent public accountants named in paragraph (t) below; no other
financial statements or schedules are required to be included in the
Registration Statement; and the selected financial data set forth in
the Prospectus under the captions "Summary Financial Information,"
"Capitalization" and "Selected Financial Data" fairly present the
information set forth therein on the basis stated in the Registration
Statement;
(t) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(u) The Company and its subsidiaries are in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety,
including without limitation those relating to occupational safety and
health, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants, including without limitation those relating
to the storage, handling or transportation of hazardous or toxic
materials (collectively, "ENVIRONMENTAL LAWS"), except where such
noncompliance with Environmental Laws would not, singly or in the
aggregate, be expected to have a material adverse effect on the
business, assets, management, financial position or results of
operations of the Company and its subsidiaries taken as a whole. The
Company, in its reasonable judgment, has concluded that, based upon
facts and circumstances existing as of the date hereof, any costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
would not, singly or in the aggregate, reasonably be expected to have a
material adverse effect on the business, assets, management, financial
position or results of operation of the Company and its subsidiaries
taken as a whole;
(v) Except as disclosed in the Prospectus, the Company and its
subsidiaries own or have the right to use all trademarks, trade names,
patent rights, copyrights, licenses, trade secrets, know-how,
intellectual property and other similar rights necessary to conduct
their business as now conducted; the Company has no knowledge of any
infringement by the Company or any of its subsidiaries of any
trademark, trade name, patent, copyright, license, trade secret,
know-how, intellectual property or other similar rights of others; and
there are no claims of infringement being made against the Company or
any of its subsidiaries regarding trademark, trade name, patent,
copyright, license, trade secret, know-how, intellectual property or
other similar rights which could, singly or in the aggregate, have a
material adverse effect on the business, assets, management, financial
position or results of operations of the Company and its subsidiaries
taken as a whole; the Company has no knowledge of any infringement by
any third party of the trademark, trade name, patent, copyright,
license, trade secret, know-how, intellectual property or other similar
rights of the Company or any of its subsidiaries; none of the
technology employed by the Company or any of its subsidiaries has been
obtained or is being used by the Company or any of its
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subsidiaries in violation of any contractual or fiduciary obligation
binding on the Company, its subsidiaries or any of their respective
directors or executive officers or, to the best of the Company's
knowledge, any of their respective employees or consultants or
otherwise in violation of the rights of any person; none of the
Company, its subsidiaries and, to the best of the Company's knowledge,
any of its employees has received any written or, to the Company's
knowledge, oral communications alleging that the Company or any of its
subsidiaries has violated or, by conducting its business as proposed,
would violate any of the intellectual property or proprietary rights of
any other person except for such violations as would not, singly or in
the aggregate, have a material adverse effect on the business, assets,
management, financial position or results of operations of the Company
and its subsidiaries taken as a whole; neither the execution nor
delivery of this Agreement, nor the operation of the business of the
Company and its subsidiaries by the employees of the Company or its
subsidiaries, nor the conduct of the business of the Company and its
subsidiaries as proposed, will, to the Company's knowledge, result in a
breach or violation of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under
which any of such employees is now obligated except for such breaches,
violations or defaults as would not, singly or in the aggregate, have a
material adverse effect on the business, assets, management, financial
position or results of operations of the Company and its subsidiaries
taken as a whole; and the Company and its subsidiaries have taken and
will maintain reasonable measures to prevent the unauthorized
dissemination or publication of its confidential information or the
confidential information of third parties in its possession;
(w) The Company and each of its subsidiaries have filed all
necessary federal, state, local and foreign income and franchise tax
returns and have paid all taxes shown as due thereon; and the Company
has no knowledge of any tax deficiencies which have been or might be
asserted or threatened against the Company or any of its subsidiaries
which could, singly or in the aggregate, materially and adversely
affect the business, assets, management, financial position or results
of operations of the Company and its subsidiaries taken as a whole;
(x) Each of the Company and its subsidiaries maintains insurance
of the types and in the amounts which it reasonably deems adequate for
its business, including, but not limited to, insurance covering real
and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against, all of which insurance is
in full force and effect;
(y) Neither the Company nor any of its subsidiaries has at any
time during the last five years (i) made any unlawful contribution to
any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
foreign, federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof;
(z) The Company has not taken and will not take, directly or
indirectly through any of its directors, officers or controlling
persons, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares; and
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(aa) The Company has filed all reports it has been required to
file under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"); such reports when filed conformed in all material
respects to the requirements of the Exchange Act and none of such
reports 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.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of ___% of the principal amount thereof, plus accrued interest
from ________, ____ to the First Time of Delivery hereunder, the principal
amount of Securities set forth opposite the name of such Underwriter in Schedule
I hereto, and (b) in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Securities as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the same purchase price set forth in clause (a) of this Section 2, that portion
of the aggregate principal amount of the Optional Securities as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractions of less than $1,000.00 principal amount), determined by multiplying
such aggregate principal amount of Optional Securities by a fraction, the
numerator of which is the maximum aggregate principal amount of Optional
Securities which such Underwriter is entitled to purchase as set forth opposite
the name of such Underwriter in Schedule I hereto and the denominator of which
is the maximum aggregate principal amount of Optional Securities which all of
the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $_____ aggregate principal amount of Optional Securities,
at the purchase price set forth in clause (a) of the first paragraph of this
Section 2, for the sole purpose of covering sales of securities in excess of the
aggregate principal amount of Firm Securities. Any such election to purchase
Optional Securities may be exercised by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate principal amount of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-entry
form which will be deposited by or on behalf of the Company with The Depository
Trust Company ("DTC") or its designated custodian. The Company will deliver the
Securities to , for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company to at least forty-eight hours in advance, by
causing DTC to credit the Securities to the account of at
DTC. The Company will cause the global Securities to be made available to
for checking at least twenty-four hours prior to the Time
of Delivery (as
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defined below) at the office of DTC or its designated custodian (the "DESIGNATED
OFFICE"). The time and date of such delivery and payment shall be, with respect
to the Firm Securities, 9:30 a.m., New York City time, on ________, _____ or
such other time and date as and the Company may agree upon
in writing, and, with respect to the Optional Securities, 9:30 a.m., New York
City time, on the date specified by in the written notice
given by of the Underwriters' election to purchase such
Optional Securities, or such other time and date as and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Securities is herein called the "FIRST TIME OF DELIVERY", such time and date for
delivery of the Optional Securities, if not the First Time of Delivery, is
herein called the "SECOND TIME OF DELIVERY", and each such time and date for
delivery is herein called a "TIME OF DELIVERY".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the offices of
Xxxxxxx Xxxx LLP, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "CLOSING LOCATION"), and the
Securities will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 6:00 p.m., New York
City time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "NEW YORK BUSINESS DAY" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
such Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
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(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may reasonably request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required under the Act at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with the
offering or sale of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Act, the Exchange Act or the Trust Indenture Act, to notify you and upon
your request to file such document and to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
or effect such compliance; and in case any Underwriter is required under the Act
to deliver a prospectus in connection with sales of any of the Securities at any
time nine months or more after the time of issue of the Prospectus, upon your
request but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many written and electronic copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Securities;
(f) To furnish to the holders of the Securities within the time period
prescribed by the Exchange Act, an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and,
within the time period prescribed by the Exchange Act, (beginning with the
fiscal quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
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(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you upon request copies of all reports or
other communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of the
Company is listed; and (ii) subject to your obligations under applicable law,
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds" and in a manner such that the Company will
not become an "investment company" as that term is defined in the Investment
Company Act;
(i) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(k) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities;
(l) Not to grant options, warrants or other rights to purchase shares
of Stock that would become exercisable (other than in connection with a "change
in control" of the Company) during the period beginning on the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
other than options under the Company's 2000 Employee Stock Purchase Plan and
such options, warrants or other rights granted to persons who, prior to such
grant, execute agreements in the form set forth in Exhibit A;
(m) Upon request of any Underwriter to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); PROVIDED, HOWEVER, that the License
shall be non-exclusive, shall not provide the right to sub-license, shall be
limited solely for the purpose described above, is granted without any fee, may
not be assigned or transferred to any Person and shall terminate upon
consummation of the public offering contemplated by the Prospectus.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
Memoranda, closing documents (including any compilations thereof) and any other
documents in
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connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
Memoranda; (iv) any fees charged by securities rating services for rating the
Securities; (v) the filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vi) the cost of preparing the Securities; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, (x) except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make, and (y) other than with
respect to filing or similar fees, the maximum liability of the Company under
clauses (a)(ii) and (a)(iii) above shall be $10,000.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) , counsel for the Underwriters, shall have furnished to
you such written opinion or opinions (a draft of each such opinion is attached
as Annex II(a) hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (v), (vi), (x), and (xii) of subsection (c)
below as well as such other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxxxx Xxxx LLP, counsel for the Company, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex II(b)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect 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
corporate power and authority to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus; in addition: (i) all of the shares of the Company's common stock,
par value $0.001 per share ("COMMON
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STOCK"), that were outstanding immediately following the closing of the
Company's initial public offering on May 31, 2000, have been duly authorized and
are validly issued, fully paid and non-assessable; (ii) all of the shares of
Common Stock that were issued pursuant to the Company's acquisition of TTI,
which acquisition closed on January 18, 2001, have been duly authorized and are
validly issued, fully paid and non-assessable; (iii) the _________shares of
Common Stock to be delivered by the Company to the Underwriters, pursuant to
that certain Underwriting Agreement, dated as of _________, ___, by and among
the Company and the Underwriters, with respect to the offer and sale of such
shares of Common Stock (the "EQUITY UNDERWRITING AGREEMENT"), at each Time of
Delivery (as such term is defined in the Equity Underwriting Agreement") have
been duly authorized and, assuming due execution and delivery of the Equity
Underwriting Agreement by all of the Underwriters and compliance by all of the
Underwriters with the terms thereof, and assuming payment in full by the
Underwriters for all of such shares of Common Stock as provided in the Equity
Underwriting Agreement, such shares of Common Stock shall be validly issued,
fully paid and non-assessable; and (iv) to such counsel's knowledge, all shares
of capital stock of the Company that are, as of the date hereof, issued and
outstanding, other than those shares of capital stock described in clauses (i)
through (iii) of this paragraph 2, have been duly authorized and are validly
issued, fully paid and non-assessable;
(iii) The Company is duly qualified as a foreign corporation for the
transaction of business and is in good standing as a foreign corporation under
the laws of the Commonwealth of Massachusetts;
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate be reasonably expected to have a material
adverse effect on the business, assets, management, financial position or
results of operations of the Company and its subsidiaries taken as a whole; and,
to such counsel's knowledge but without having investigated any governmental
records or court dockets, no such proceedings are overtly threatened by
governmental authorities or others;
(v) The Company has full corporate power and authority to enter into
this Agreement and this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The Securities have been duly authorized, executed, issued and
delivered by the Company and authenticated by the Trustee and constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their respective terms (except that such counsel expresses no
opinion as to the enforceability of any indemnification and contribution
provisions thereof); and the Securities and the Indenture conform as to legal
matters, in all material respects, to the description thereof set forth in the
Prospectus under the caption "Description of Notes;"
(vii) The Indenture has been duly authorized by all necessary corporate
action on the part of the Company and its stockholders, if necessary, and has
been duly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms (except that such counsel expresses no opinion as to the
enforceability of any indemnification and contribution provisions thereof); and
the Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "TRUST INDENTURE ACT");
-14-
(viii) The issue and sale of the Securities to be delivered at such
Time of Delivery by the Company and the compliance by the Company with all of
the provisions of the Securities, the Indenture, and this Agreement and the
consummation of the transactions herein and therein contemplated will not (a)
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (b) result in any violation of
the provisions of the Charter or By-laws or any federal or Massachusetts
statute, rule or regulation, or (c) to such counsel's knowledge, violate any
order known to such counsel of any federal or Massachusetts court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
(ix) No consent, approval, authorization, order, filing, registration
or qualification of or with any federal or Massachusetts court or governmental
agency or body is required for the issue and sale of the Securities to be issued
at such Time of Delivery or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except for the registration
under the Act of the Securities or as is required under the Trust Indenture Act,
and such consents, approvals, authorizations, filings, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters (as to which such counsel renders no opinion);
(x) The statements set forth in the Prospectus under the caption
"Description of Notes," insofar as they purport to summarize provisions of the
Securities and the terms of the Stock are accurate summaries in all material
respects of the provisions or terms purported to be summarized therein, and the
statements set forth in the Prospectus under the captions "Certain United States
Federal Income Tax Considerations," "Shares Eligible for Future Sale" and
"Underwriting," insofar as they purport to describe the provisions of the laws
and the underwriting agreement and lock-up agreements referred to therein, are
accurate and complete in all material respects;
(xi) The Company is not an "investment company," as such term is
defined in the Investment Company Act and, immediately after giving effect to
the transactions contemplated by this Agreement, will not be an "investment
company;"
(xii) The Registration Statement, as of its effective date, and the
Prospectus, as of its date (other than the financial statements and related
schedules and other financial and accounting data therein, as to which such
counsel expresses no opinion) comply as to form in all material respects with
the requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder; and such counsel does not know of any contracts or other
documents of a character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or the
Prospectus which are not filed or described as required;
(xiii) The documents incorporated by reference into the Prospectus as
of its date, or any amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related schedules
and other financial and accounting data therein, as to which such counsel
expresses no opinion) comply as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder; and
-15-
(xiv) The Registration Statement has become effective under the Act. To
the best of such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued by the Commission nor has any
proceeding been instituted for that purpose under the Act. The Prospectus has
been filed with the Commission pursuant to Rule 424(b) of the rules and
regulations under the Act within the time period required thereby.
(d) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Xxxxxx Xxxxxxxx LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the business, assets, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;
(f) On or after the date hereof: (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York or Massachusetts state authorities; (iv) the occurrence of any
material adverse change in the existing, financial, political or economic
conditions of the United States or elsewhere which, in the judgment of the
Representatives, would materially and adversely affect the financial markets or
the markets for the Securities and other debt securities or the market for or
any equity securities; or (v) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (v) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public
-16-
offering or the delivery of the Securities being issued at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(h) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from each of the directors, executive officers and other
stockholders of the Company listed on Schedule II hereto, in form and substance
previously agreed to by you and attached hereto as Exhibit A;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
(j) Xxxxxxxxxx Xxxxxxxxxxx, local counsel for Sonus Networks Limited, a
United Kingdom corporation (the "UK SUBSIDIARY"), shall have furnished to you
their written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The UK Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the United Kingdom; and
(ii) All of the issued shares of capital stock of the UK
Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable, and are owned directly or indirectly by the Company,
and, to the knowledge of such counsel, free and clear of all liens,
encumbrances, equities or claims.
(k) Singapore counsel reasonably satisfactory to the Underwriters, as
local counsel for Sonus Networks Pte Ltd, a Singapore corporation (the
"SINGAPORE SUBSIDIARY"), shall have furnished to you their written opinion (a
draft of such opinion is attached as Annex II(e) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Singapore Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the United Kingdom; and
(ii) All of the issued shares of capital stock of the
Singapore Subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned directly or indirectly by
the Company and, to the knowledge of such counsel, free and clear of
all liens, encumbrances, equities or claims.
(l) Texas counsel reasonable satisfactory to the Underwriters, as local
counsel for TTI, a Texas corporation, shall have furnished to you their written
opinion (a draft of such opinion is attached as Annex II(d) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the effect that:
(i) TTI has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Texas;
and
(ii) All of the issued shares of capital stock of the TTI have
been duly authorized and validly issued, are fully paid and
nonassessable, and are owned directly or indirectly by
-17-
the Company, free and clear of all liens, encumbrances, equities or
claims to the knowledge of such counsel.
(m) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the
-18-
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the
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Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the purchase
of such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Securities, or the Company notifies
you that it has so arranged for the purchase of such Securities, you or the
Company shall have the right to postpone such Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities to be purchased at such Time of
Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of Securities which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above,
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the aggregate principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities to be
purchased at such Time of Delivery, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligation of
the Underwriters to purchase and of the Company to sell the Optional Securities)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of
; and if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
-21-
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Underwriters imposing any limitation of any kind.
-22-
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
SONUS NETWORKS, INC.
By:
---------------------------
Name:
Title:
Accepted as of the date hereof:
Co-Representatives
By:
----------------------------------
(on behalf of each of the Underwriters)
-23-
SCHEDULE I
PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF OPTIONAL SECURITIES
FIRM SECURITIES TO BE PURCHASED
TO BE IF MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
.............................................................. $ $
..............................................................
..............................................................
..............................................................
[NAMES OF OTHER UNDERWRITERS].................................
----------- ----------
Total....................................... $ $
=========== ==========
-24-
SCHEDULE II
LOCK-UP AGREEMENTS
-25-
EXHIBIT A
-26-
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached hereto;
and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures
specified in such letter nothing came to their attention as a result of
the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the
disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus, for them to be
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period of the preceding year
and with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
ANNEX II(a)
ANNEX II(b)
ANNEX II(c)
ANNEX II(d)
