Exhibit 1.1
______________ Shares
PRIMUS TELECOMMUNICATIONS
GROUP, INCORPORATED
Common Stock
UNDERWRITING AGREEMENT
Xxxxxx Brothers Inc., October [ ], 1999
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Primus Telecommunications Group, Incorporated, a Delaware corporation
(the "Company"), proposes to sell an aggregate of ________ shares (the "Firm
Stock") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"). It is understood that, subject to the conditions hereinafter stated,
the Firm Stock will be sold by the Company to the several Underwriters named in
Schedule I hereto (the "Underwriters") in connection with the offering and sale
of such Firm Stock. Xxxxxx Brothers Inc. and Xxxxxx Xxxxxxx & Co. Incorporated
shall act as joint book-running managers (the "Joint Book-Running Managers").
The Joint Book-Running Managers, together with CIBC World Markets Corp., Xxxx
Xxxxx Xxxx Xxxxxx, Incorporated, Xxxxxxxx & Company, Inc., Xxxxx & Xxxxxxxxxxxx,
Inc., and Xxxxxxx Bros., L.P., shall act as the representatives (the
"Representatives") of the several Underwriters.
In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an aggregate of _________ additional shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the Stock
has (i) been prepared by the Company in conformity in all material respects
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities Act
and (iii) become effective under the Securities Act. Copies of such
registration statement and each of the amendments thereto have been
delivered by the Company to the Representatives. As used in this
Agreement, "Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or amendments thereof,
before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Joint
Book-Running Managers pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statement, as amended at
the Effective Time, including any documents incorporated by reference
therein at such time and all information contained in the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations in accordance with Section 5(a) hereof and deemed to be a part
of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus"
means such final prospectus in the form as first filed with the Commission
pursuant to paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any annual report of the Company filed
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statement. If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration
2
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations, the
Registration Statement and any further amendment or supplement thereto does
not and will not, as of the applicable effective date, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus and any further amendment or supplement
thereto does not and will not, as of the applicable filing date, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;
provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statement or the Prospectus
in reliance upon and in conformity with written information furnished to
the Company through the Joint Book-Running Managers by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus, if
any, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed with
Commission, will conform in all material respects to the requirements of
the Exchange Act 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, in light of the circumstances in which they were
made, not misleading.
(d) The Company, and each of the subsidiaries (as defined in Section
15) of the Company, has been duly organized and is validly existing and in
good standing under the laws of their respective jurisdictions of
organization, is duly qualified to do business and is in good standing in
each jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such qualification,
except where the failure to be so qualified would not reasonably be
expected to have a material adverse effect on the business or property of
the Company and the subsidiaries of the Company taken as a whole, and each
has all corporate power and authority necessary to own or hold its
respective properties and to conduct the business in which it is engaged;
and none of the subsidiaries of the Company (other than Primus
Telecommunications, Inc., Primus Telecommunications (Australia) Pty. Ltd.
and Primus Telecommunications
3
Pty. Ltd. (collectively, the "Significant Subsidiaries")) is a "significant
subsidiary," as such term is defined in Rule 405 of the Rules and
Regulations.
(e) 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 and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company (the "Equity Interests") have been duly and
validly authorized and issued and are fully paid and non-assessable and the
Equity Interests (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) This Agreement has been duly authorized, executed and delivered by
the Company and by the Significant Subsidiaries.
(g) The shares of the Stock to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the description thereof in the Prospectus.
(h) The execution, delivery and performance of this Agreement by the
Company and the Significant Subsidiaries and the consummation by the
Company and the Significant Subsidiaries of the transactions contemplated
by this Agreement (the "Transactions") (i) 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 indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
the subsidiaries of the Company is a party or by which the Company or any
of the subsidiaries of the Company is bound or to which any of the
properties or assets of the Company or any of the subsidiaries of the
Company is subject, (ii) will not result in any violation of the provisions
of the charter or by-laws of the Company or any of the subsidiaries of the
Company, (iii) will not result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of the subsidiaries of the
Company or any of their properties or assets; and (iv) except for the
registration of the Stock under the Securities Act, clearance by the
National Association of Securities Dealers, Inc., and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, will not require any consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body; provided, however, that the Company shall not be in breach
of this representation where, with respect to clauses (i), (iii) and (iv)
of this paragraph, such conflicts, breaches, violations, defaults or
failures to obtain any consent, approval, authorization or order to make
such filing or registration would not have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, or the business
4
of the Company and the subsidiaries of the Company taken as a whole (a
"Material Adverse Effect").
(i) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest quarterly 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
or contemplated in the Prospectus; and, since such date, there has not been
any material change in the capital stock or long-term debt of the Company
or any of the subsidiaries of the Company or any Material Adverse Effect,
or any development involving a prospective Material Adverse Effect,
otherwise than as set forth or contemplated in the Prospectus.
(j) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except that
the unaudited financial statements may exclude supporting schedules and are
subject to normal year-end adjustments).
(k) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report is included in the Prospectus and
who have delivered the initial letter referred to in Section 7(l) hereof,
are independent public accountants as required by the Securities Act and
the Rules and Regulations.
(l) Ernst & Young LLP, who have certified certain financial statements
of TresCom International, Inc., whose report is included in the Prospectus,
were independent public accountants of TresCom International, Inc. as
required by the Securities Act and the Rules and Regulations during the
periods covered by the financial statements on which they reported
contained in the Prospectus.
(m) KPMG LLP, who have certified certain financial statements of
Telegroup, Inc. and certain subsidiaries, whose report is included in the
Prospectus and who have delivered the initial letter referred to in Section
7(m) hereof, are independent public accountants of Telegroup, Inc. as
required by the Securities Act and the Rules and Regulations.
(n) The Company and each of the subsidiaries of the Company owns or
possesses adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights, license applications and licenses
("Intellectual Property") which are necessary for the conduct of their
respective businesses and has no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of
5
conflict with, any Intellectual Property or related rights of others,
except where (i) the failure to own or possess adequate rights to use such
Intellectual Property or (ii) such conflicts, if any, would not have a
Material Adverse Effect.
(o) The Company and each of the subsidiaries of the Company have good
and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects, except such liens,
encumbrances or defects as are described in, or in information incorporated
by reference in, the Registration Statement or such as do not materially
affect the value of such property or do not materially interfere with the
use made and proposed to be made of such property by the Company and the
subsidiaries of the Company. All real property and buildings material to
the Company and its subsidiaries which are held under lease by the Company
and each of the subsidiaries of the Company are held by the Company and the
subsidiaries of the Company, respectively, under valid, subsisting and
enforceable leases, with such exceptions as are not material to, and do not
interfere with, the use made and proposed to be made of such property and
buildings by the Company and each of the subsidiaries of the Company.
(p) There are no legal or governmental proceedings pending to which
the Company or any of the subsidiaries of the Company is a party or of
which any property or asset of the Company or any of the subsidiaries of
the Company is the subject which, if determined adversely to the Company or
any of the subsidiaries of the Company, could reasonably be expected to
have a Material Adverse Effect; and to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others that are required to be disclosed in
the Prospectus which are not so disclosed.
(q) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(r) No contracts or other documents are required to be described in
the Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by the Rules
and Regulations.
(s) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, which is required
to be described in the Prospectus which is not so described.
(t) Since the date as of which information is given in the Prospectus
through the date hereof, or except as may otherwise be disclosed in, or in
information incorporated by reference in, the Prospectus, the Company has
not (i) issued or granted any securities, other than in connection with any
employment contract, benefit plan or other similar
6
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, or in connection with a dividend reinvestment or
stock purchase plan, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
capital stock.
(u) Neither the Company nor any of the subsidiaries of the Company
(i) is in violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any time period, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject, including, without
limitation, operating agreements, except where it would not reasonably be
expected to have a Material Adverse Effect, or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its properties or assets may be subject or has
failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of
its properties or assets or to the conduct of its business, except where it
would not reasonably be expected to have a Material Adverse Effect.
(v) Neither the Company nor any of the subsidiaries of the Company
nor, to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company
or any of the subsidiaries of the Company, has (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(w) None of the Company nor any subsidiary of the Company is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (the "Investment Company Act").
(x) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, and all regulations promulgated thereunder relating to issuers
doing business in Cuba.
(y) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right (other than rights which have been waived or
satisfied) to require the Company to file a registration statement under
the Securities Act with respect to any securities of the
7
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Securities
Act.
(z) Except in connection with certain acquisitions described in the
Prospectus, the Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the Prospectus, including
any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act, other than shares issued pursuant to employee benefit
plans, qualified stock options plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.
2 Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell _________ shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule I hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Joint Book-Running Managers may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to _________ shares of the Option Stock. Such options are granted
solely for the purpose of covering over-allotments in the sale of Firm Stock and
are exercisable as provided in Section 4 hereof. Shares of Option Stock shall
be purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedule I hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Joint Book-Running
Mangers so that no Underwriter shall be obligated to purchase Option Stock other
than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be
$[________] per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
3. Offering of Stock by the Underwriters. Upon authorization by the
Joint Book-Running Managers of the release of the Firm Stock, the several
Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
4 Delivery of and Payment for the Stock. (a) Delivery of and
payment for the Firm Stock shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx Xxx Xxxx 00000, at 9:30 A.M., New York
City time, on October [ ], 1999 or at such other date or place as shall be
determined by agreement between the Joint Book-Running
8
Managers and the Company. This date and time are sometimes referred to as the
"First Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the Firm Stock to the Joint
Book-Running Managers for the account of each Underwriter against payment to or
upon the order of the Company of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock
shall be registered in such names and in such denominations as the Joint Book-
Running Managers shall request in writing not less than two full business days
prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Joint Book-Running Managers.
Such notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the Joint Book-
Running Managers, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as a "Second Delivery Date"
and the First Delivery Date and any Second Delivery Date are sometimes each
referred to as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the Joint
Book-Running Managers and the Company) at 9:30 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver
or cause to be delivered the certificates representing the Option Stock owned by
it to the Joint Book-Running Managers for the account of each Underwriter
against payment to or upon the order of the Company of the purchase price by
wire transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Option Stock shall be registered in such names and in such denominations as the
Joint Book-Running Managers shall request in the aforesaid written notice.
5 Further Agreements of the Company. The Company further agrees:
(a) To prepare the Rule 462 Registration Statement, if necessary, in
a form approved by the Joint Book-Running Managers, which approval will not
be unreasonably withheld, delayed or conditioned, and to file such Rule 462
Registration Statement with the Commission on the date hereof; to prepare
the Prospectus in a form approved by the Joint Book-Running Manager, which
approval will not be unreasonably withheld, delayed or conditioned, and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business
9
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 Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the last Delivery Date
except as permitted herein; to advise the Joint Book-Running Managers,
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 the Joint Book-Running Managers 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 Stock; to advise the Joint
Book-Running Managers, 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 Stock 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 the 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 use
promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Joint Book-Running Managers
and to counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Joint Book-Running Managers in New
York City such number of the following documents as the Joint Book-Running
Managers reasonably shall request: (i) conformed copies of the
Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this
Agreement and the computation of per share earnings), (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus and
(iii) any document incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale of
the Stock (or any other securities relating thereto) and if at such time
any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary 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 Securities Act or the Exchange
Act, to notify the Joint Book-Running Managers and, upon the request of the
Joint Book-Running Managers, to file such document and to prepare and
furnish
10
without charge to each Underwriter and to any dealer in securities as many
copies as the Joint Book-Running Managers may from time to time reasonably
request of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Joint Book-
Running Managers (based on the opinion of their respective legal counsels),
be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission (i) any amendment to the
Registration Statement or supplement to the Prospectus, (ii) any document
incorporated by reference in the Prospectus or (iii) any Prospectus
pursuant to Rule 424 of the Rules and Regulations, the Company shall
furnish a draft copy thereof to the Underwriters and counsel to the
Underwriters and the Company shall not file any such document to which the
Joint Book-Running Managers shall reasonably object;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) For a period of three years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange or automatic quotation system upon which the Stock may
be listed or quoted pursuant to requirements of or agreements with such
exchange or system or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the Joint Book-
Running Managers may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the Joint Book-
Running Managers may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided, however, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in
suits, other than those suits arising out of the offering or sale of the
Stock, in any jurisdiction where it is not now so subject. In each
jurisdiction in which the Stock have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement.
The Company will also supply the Underwriters with such
11
information as is necessary for the determination of the legality of the
Stock for investment under the laws of such jurisdictions as the
Underwriters may reasonably request;
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than (A) the Stock and (B)
shares of Common Stock issued pursuant to mergers, acquisitions and similar
transactions or under employee benefit plans, stock option plans or other
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights) or substantially similar
securities, (ii) sell or grant options, rights or warrants with respect to
any shares of Common Stock or securities convertible into or exchangeable
for Common Stock or substantially similar securities (other than the grant
of options pursuant to benefit plans existing on the date hereof), or (iii)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (i), (ii) or (iii) above is to be settled by delivery
of Common Stock or other securities, in cash or otherwise, in each case
without the prior written consent of the Joint Book-Running Managers on
behalf of the Underwriters; and to cause each officer and director of the
Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, substantially in the form of Exhibit I hereto;
(j) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus; and
(k) To use reasonable best efforts to ensure that none of the Company
nor any subsidiary of the Company shall become an "investment company"
within the meaning of such term under the Investment Company Act and the
rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated therein by reference, all as provided in this Agreement; (d) the
costs of producing and distributing this Agreement and any other related
documents in connection with the offering, purchase, sale and delivery of the
Stock; (e) the filing fees incident to securing the review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Stock; (f)
any applicable listing fees; (g) the fees and expenses of qualifying the Stock
under the securities laws of the several jurisdictions as provided in Section
5(i) and of preparing, printing and distributing
12
a Blue Sky Memorandum (including related reasonable fees and expenses of counsel
to the Underwriters); (h) the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Stock including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (i) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Section 11, the Underwriters shall pay their
own costs and expenses, including the costs and expenses of their counsel, any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Rule 462 Registration Statement, if any, and the Prospectus
shall have been timely filed with the Commission in accordance with Section
5(a); 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
any request of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus or otherwise shall have been
complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains any untrue
statement of a fact which, in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters, is material or omits to state any fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Xxxxxx Xxxxxxxx LLP shall have furnished to the Representatives
its written opinion, as counsel to the Company, addressed to the
Underwriters and dated such
13
Delivery Date, to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(e) Xxxxxxx Berlin Shereff Xxxxxxxx, LLP shall have furnished to the
Representatives its written opinion, as special U.S. telecommunications
counsel to the Company, addressed to the Underwriters and dated such
Delivery Date, to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(f) Rakisons Solicitors shall have furnished to the Representatives
its written opinion, as British regulatory counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, to the effect
set forth in Exhibit C hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(g) Xxxxxxx & Company Solicitors shall have furnished to the
Representatives its written opinion, as Australian regulatory counsel to
the Company, addressed to the Underwriters and dated such Delivery Date, to
the effect set forth in Exhibit D hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(h) Bruckhaus Xxxxxxxx Xxxxxx Xxxxx shall have furnished to the
Representatives its written opinion, as German regulatory counsel to the
Company, addressed to the Underwriters and dated such Delivery Date, to the
effect set forth in Exhibit G hereto and to such further effect as counsel
to the Underwriters may reasonably request.
(i) Nagashima & Ohno shall have furnished to the Representatives its
written opinion, as Japanese regulatory counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, to the effect set forth
in Exhibit H hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(j) Osler, Xxxxxx & Harcourt shall have furnished to the
Representatives its written opinion, as special Canadian telecommunications
regulatory counsel for the Company, addressed to the Underwriters and dated
such Delivery Date, to the effect set forth in Exhibit E hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(k) Xxxxxxx, Xxxxxxxx & Xxxxxxxx shall have furnished to the
Representatives its written opinion, as special Canadian counsel for the
Company, addressed to the Underwriters and dated such Delivery Date, to the
effect set forth in Exhibit F hereto and to such further effect as counsel
to the Underwriters may reasonably request.
(l) The Representatives shall have received on the date hereof and
such Delivery Date a letter, dated the date hereof and the Delivery Date,
as the case may be, in form and substance reasonably satisfactory to you,
from Deloitte & Touche LLP, independent public accountants to the Company,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
14
financial statements and certain financial information, including the
financial information contained or incorporated by reference in the
Prospectus as identified by you.
(m) The Representatives shall have received on the date hereof and
such Delivery Date a letter, dated the date hereof and the Delivery Date,
as the case may be, in form and substance reasonably satisfactory to you,
from KPMG LLP, independent public accountants to Telegroup, Inc. containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information, including the financial information
contained or incorporated by reference in the Prospectus as identified by
you.
(n) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of the President or a Vice President
and the Treasurer or Chief Financial Officer of the Company stating that:
(i) The representations and warranties of the Company in Section 1
hereof are true and correct as of such Delivery Date;
(ii) The Company has performed all agreements and satisfied all
conditions on its part to be performed or satisfied under this
Agreement at or prior to such Delivery Date;
(iii) (A) None of the Company or any of the subsidiaries of the
Company has sustained, since the date of the latest quarterly
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such
date there has not been any change in the capital stock or long-term
debt of the Company or any of the subsidiaries of the Company or any
Material Adverse Effect, or any development involving a prospective
Material Adverse Effect, otherwise than as set forth or contemplated
in the Prospectus; and
(v) They have carefully examined the Registration Statement and, in
their opinion, (A) as of the Effective Date, the Registration
Statement, and as of its date and the date hereof, the Prospectus, did
not include any untrue statement of a material fact and did not omit
to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and (B) since the Effective Date, no event has occurred
which was required under the Securities Act to have been set forth in
a supplement or amendment to the Registration Statement or the
Prospectus.
(o) None of the Company or any of the subsidiaries of the Company
shall have sustained, since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, (i) any
loss or interference with its business
15
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 or
(ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of the subsidiaries of the
Company or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
subsidiaries of the Company 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 Joint Book-
Running Managers, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(p) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market or in the over-the-counter market, or trading in
any securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal
or state authorities, (iii) the United States shall have become engaged in
material hostilities, there shall have been an escalation in material
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as
to make it, in the judgment of the Joint Book-Running Managers,
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(q) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance.
(r) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel to the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents and information as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(s) The Representatives shall have received from each officer and
director of the Company, an executed letter in the form of Exhibit I
pursuant to Section 5(i) hereto.
16
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution. (a) The Company and Primus
Telecommunications, Inc., a Delaware corporation, Primus Telecommunications
(Australia) Pty. Ltd., a company organized under the laws of Australia, and
Primus Telecommunications Pty. Ltd., a company organized under the laws of
Australia (collectively, the "Principal Subsidiaries"), jointly and
severally, shall indemnify and hold harmless each Underwriter, its
officers, employees and directors and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which
such Underwriter, officer, employee, director or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in (A) any Preliminary Prospectus, the Registration Statement,
the Prospectus or in any amendment or supplement thereto or (B) any blue
sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically
for the purpose of qualifying any or all of the Stock under the securities
laws of any state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky Application") or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement, the Prospectus or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be
stated therein or necessary, in the case of the Registration Statement or
any Blue Sky Application, to make the statements therein not misleading or,
in the case of the Preliminary Prospectus or the Prospectus, to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Underwriter and each such
officer,
17
employee, director or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter,
officer, employee, director or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred upon
written submission to the Company of documentation evidencing such
incurrence; provided, however, that the Company and the Principal
Subsidiaries shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement, the Prospectus or in any such amendment or supplement, or in any
Blue Sky Application, in reliance upon and in conformity with the written
information concerning such Underwriter furnished to the Company through
the Joint Book-Running Managers by or on behalf of any Underwriter
specifically for inclusion therein, which information consists solely of
the information described in Section 8(e); provided further that as to the
Preliminary Prospectus, this indemnity agreement shall not inure to the
benefit of any Underwriter or any officer, employee, director or
controlling person of that Underwriter on account of any loss, claim,
damage, liability or action arising from the sale of Stock to any person by
such Underwriter if (i) such Underwriter failed to send or give a copy of
the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Securities Act and (ii) the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in the Preliminary Prospectus was
corrected in the Prospectus, unless in each case, such failure resulted
from noncompliance by the Company with Section 5(c). For purposes of the
last proviso to the immediately preceding sentence, the term "Prospectus"
shall not be deemed to include the documents incorporated therein by
reference, and no Underwriter shall be obligated to send or give any
supplement or amendment to any document incorporated by reference in any
Preliminary Prospectus or the Prospectus to any person other than a person
to whom such Underwriter had delivered such incorporated document or
documents in response to a written request therefor. The foregoing
indemnity agreement is in addition to any liability which the Company or
the Principal Subsidiaries may otherwise have to any Underwriter or to any
officer, employee, director or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its directors, employees and officers, and each
person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, employee, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
in (A) any Preliminary Prospectus, the Registration Statement, the
Prospectus or in any amendment or supplement thereto or (B) any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus or in
any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary, in the case of
the Registration Statement or the Blue Sky Application, to make the
statements therein not misleading or, in the case of the Preliminary
Prospectus or the Prospectus, to make the statements therein, in the light
of the circumstances under which they were made, not misleading, but in the
case of clauses (i) and (ii) only to the extent that the untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with the written information concerning
such Underwriter furnished to the Company through the Joint Book-Running
Managers by or on behalf of that Underwriter specifically for inclusion
therein as described in Section 8(e), and shall reimburse the Company and
any such director, employee, officer or controlling person for any legal or
other expenses reasonably incurred by the Company or any such director,
employee, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Underwriter
18
may otherwise have to the Company or any such director, officer, employee
or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
the indemnifying party has been materially prejudiced by such failure and
provided further that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that the indemnified party shall have the right to employ separate
counsel to represent jointly the indemnified party and its respective
directors, employees, officers and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the indemnified party against the indemnifying party under this
Section 8 if such indemnified party shall have been advised in writing that
the representation of such indemnified party and those directors,
employees, officers, and controlling persons by the same counsel would be
inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, and in that event the
fees and expenses of such separate counsel shall be paid by the
indemnifying party. It is understood that the indemnifying party shall not
be liable for the fees and expenses of more than one separate firm (in
addition to local counsel in each jurisdiction) for all indemnified parties
in connection with any proceeding or related proceedings. Each indemnified
party, as a condition of the indemnity agreements contained in Sections
8(a) and 8(b), shall use its reasonable best efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final
19
judgment in favor of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and the Principal
Subsidiaries, on the one hand, and the Underwriters, on the other hand,
from the offering of the Stock or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Principal
Subsidiaries, on the one hand, and the Underwriters, on the other hand,
with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Principal Subsidiaries, on the one hand, and the
Underwriters, on the other hand, with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company, on the one hand, and the total
underwriting commissions and discounts received by the Underwriters with
respect to the Stock purchased under this Agreement, on the other hand,
bear to the total gross proceeds from the offering of the Stock under this
Agreement, 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 whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the Company and the Principal Subsidiaries, on the one hand, or the
Underwriters, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. For purposes of the preceding two
sentences, the net proceeds deemed to be received by the Company shall be
deemed to be also for the benefit of the Principal Subsidiaries and
information supplied by the Company shall also be deemed to have been
supplied by the Principal Subsidiaries. Each of the Company and the
Principal Subsidiaries and the Underwriters agrees that it would not be
just and equitable if contribution pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if either the Underwriters or the
Company and the Principal Subsidiaries, as the case may be, were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), 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 Section 8(d),
20
no Underwriter shall be required to indemnify or contribute any amount in
excess of the amount by which the proceeds received by the Underwriters
from an offering of the Stock exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 8 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity. The Underwriters' obligations to
contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth in the last sentence of the cover page and in
paragraphs [3, 8 (regarding stabilization), 9 and 10] under the caption
"Underwriting" in, the Prospectus constitute the only information
concerning such Underwriters furnished in writing to the Company by or on
behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
9. Default by Any Underwriter. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-defaulting Underwriter in
Schedule I hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting Underwriters in Schedule
I hereto; provided, however, that the remaining non-defaulting Underwriters
shall not be obligated to purchase any of the Stock on such Delivery Date if the
total number of shares of the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total number of shares of the Stock to be purchased on such Delivery Date, and
any remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock which it agreed to purchase on
such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Joint Book-Running Managers who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Stock to be purchased on such Delivery
Date. If the foregoing maximums are exceeded and the remaining Underwriters or
other underwriters satisfactory to the Joint Book-Running Managers do not elect
to purchase the shares which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such Delivery Date, this Agreement (or, with respect
to the Second Delivery Date, the obligation of the Underwriters to purchase, and
of the Company to sell, the Option Stock) shall terminate without liability on
the part of any non-defaulting Underwriter or the Company, except that the
Company will continue to be liable for the payment of expenses to the extent set
forth in Sections 6 and 11. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the
21
context requires otherwise, any party not listed in Schedule I hereto who,
pursuant to this Section 9, purchases Firm Stock which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Joint Book-Running Managers or the
Company may postpone the First Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Joint Book-Running Managers by notice given to and received by
the Company prior to delivery of and payment for the Firm Stock if, prior to
that time, any of the events described in Section 7(o) or 7(p) shall have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
11. Reimbursement of Underwriter's Expenses. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company shall reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock and upon demand the Company shall pay the full amount thereof to the
Joint Book-Running Managers. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
12 Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission to:
Xxxxxx Brothers Inc.
Three World Financial Center
New York, New York 10285
Attention: Syndicate Department
(Fax: 000-000-0000); and
(b) if to the Company or to the Principal Subsidiaries, shall be
delivered or sent by mail or facsimile transmission to the address of the
Company set forth in the Prospectus, Attention: Chairman and Chief
Executive Officer (Fax: (000) 000-0000);
22
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. and Xxxxxx Xxxxxxx
& Co. Incorporated, as the Joint Book-Running Managers.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective representatives and successors. This Agreement and the terms
and provisions hereof are for the sole benefit of only those persons, except
that (A) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the benefit
of the person or persons, if any, who control any Underwriter within the meaning
of Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 8(b) of this Agreement shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Principal Subsidiaries, on the one hand,
and the Underwriters, on the other hand, contained in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall survive
the delivery of and payment for the Stock and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". As used
herein, "business day" means any day on which the New York Stock Exchange, Inc.
and the Nasdaq National Market are open for trading. As used herein, the term
"subsidiary" of any entity means any other entity at least 51% of the ownership
interests of which are owned, directly or indirectly, by such Company.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Consent to Jurisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("Related Proceedings") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related
23
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. The parties further agree that service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each of Primus
Telecommunications (Australia) Pty. Ltd. and Primus Telecommunications Pty Ltd.
hereby irrevocably appoints CT Corporation System, which currently maintains a
New York City office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx
of America, as its agent to receive service of process or other legal summons
for purposes of any such action or proceeding that may be instituted in any
state or federal court in the City and State of New York.
18. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
19. Counterparts and Facsimile Signatures. This Agreement may be
executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be an original
but all such counterparts shall together constitute one and the same instrument.
This Agreement may be executed by facsimile signature which for all purposes
shall be deemed to be an original signature.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Remainder of Page Intentionally Left Blank]
24
If the foregoing correctly sets forth the agreement among the Company,
the Principal Subsidiaries and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
By: _____________________________________
Name: K. Xxxx Xxxxx
Title: President & Chief Executive Officer
PRIMUS TELECOMMUNICATIONS,
INC.
By: _____________________________________
Name: K. Xxxx Xxxxx
Title: President & Chief Executive Officer
PRIMUS TELECOMMUNICATIONS
(AUSTRALIA) PTY. LTD.
By: _____________________________________
Name: K. Xxxx Xxxxx
Title: President & Chief Executive Officer
PRIMUS TELECOMMUNICATIONS
PTY. LTD.
By: _____________________________________
Name: K. Xxxx Xxxxx
Title: President & Chief Executive Officer
25
Accepted:
XXXXXX BROTHERS INC.,
XXXXXX XXXXXXX & CO. INCORPORATED,
CIBC WORLD MARKETS CORP.,
XXXX XXXXX XXXX XXXXXX, INCORPORATED,
XXXXXXXX & COMPANY, INC.,
XXXXX & XXXXXXXXXXXX, INC., AND
XXXXXXX BROS., L.P.,
ACTING SEVERALLY ON BEHALF
OF THEMSELVES AND THE
OTHER UNDERWRITERS
NAMED IN SCHEDULE I HERETO
XXXXXX BROTHERS INC.
By: ____________________________
Authorized Representative
26
SCHEDULE I
Number of Shares of Firm Stock
Underwriters to Be Purchased
------------ ---------------
--------------------------------------------------------------------------------
Xxxxxx Brothers Inc. ..................... [ ]
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated ........ [ ]
--------------------------------------------------------------------------------
CIBC World Markets Corp. ................. [ ]
--------------------------------------------------------------------------------
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ..... [ ]
--------------------------------------------------------------------------------
Xxxxxxxx & Company, Inc. ................. [ ]
--------------------------------------------------------------------------------
Xxxxx & Xxxxxxxxxxxx, Inc. ............... [ ]
--------------------------------------------------------------------------------
Xxxxxxx Bros., L.P. ...................... [ ]
--------------------------------------------------------------------------------
Total .................................... [ ]
=============
--------------------------------------------------------------------------------
EXHIBIT A
[LETTERHEAD OF XXXXXX XXXXXXXX LLP]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Primus Telecommunications Group, Incorporated
---------------------------------------------
Ladies and Gentlemen:
Based upon the foregoing assumptions, and subject to the
qualifications set forth below, we are of the opinion that:
(i) The Company and each of its subsidiaries which have been incorporated
in one of the 50 states of the United States (each, a "U.S. Subsidiary") have
been duly incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification (except
where the failure to so qualify, singly or in the aggregate, would not have a
material adverse effect on the consolidated financial position, stockholders'
equity, results of operations or business of the Company and its subsidiaries
taken as a whole), and have all corporate power and authority necessary to own
or hold their respective properties and conduct the businesses in which they are
engaged.
(ii) 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 and validly authorized and issued, are fully paid and non-assessable;
and all of the issued shares of capital stock of each U.S. Subsidiary of the
Company have been duly and validly authorized and issued and are fully
A-2
paid, non-assessable and (except for directors' qualifying shares and except as
set forth in the Prospectus) are owned of record and, to the best of our
knowledge, beneficially, directly or indirectly, by the Company, free and clear
of all liens, encumbrances, equities or claims. The shares of the Stock to be
issued and sold by the Company to the Underwriters under the Underwriting
Agreement have been duly and validly authorized and, when issued and delivered
against payment therefor as provided in the Underwriting Agreement, will be duly
and validly issued, fully paid and non-assessable; and the Stock conforms in all
material respects to the description thereof in the Prospectus.
(iii) Except as described in the Prospectus, there are no preemptive or
other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument known to us;
(iv) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion, the Rule 462 Registration
Statement, if any, was filed with the Commission on the date specified therein,
the Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and, to our knowledge, (a) no stop order suspending the
effectiveness of the Registration Statement has been issued and (b) no
proceeding for that purpose is pending or threatened by the Commission;
(v) The Registration Statement, as of its Effective Date, and the
Prospectus, as of its date, and any further amendments or supplements thereto,
as of their respective dates, made by the Company prior to such Delivery Date
(other than the financial statements and other financial data contained therein,
as to which we express no opinion) complied as to form in all material respects
with the requirements of the Securities Act and the Rules and Regulations; the
documents incorporated by reference in the Prospectus (other than the financial
statements and related schedules therein, as to which we express no opinion),
when they were filed with the Commission, when taken together with any
amendments thereto ("Exchange Act Documents"), complied as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder;
(vi) The statements contained in the Prospectus under the captions
"Management - Stock Plans," "Transactions with Affiliates and Others" and
"Federal Income Tax Considerations," insofar as they describe statutes,
regulations, legal or governmental proceedings, contracts or other documents
referred to therein are accurate and fairly summarize, in each case in all
material respects, the information called for with respect to such documents and
matters and, insofar as such statements constitute matters of law or legal
conclusions, have been reviewed by us and fairly present in all material
respects the information disclosed therein.
(vii) To the best of our knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the
A-3
Securities Act or by the Rules and Regulations which have not been described or
filed as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
(viii) The statements contained in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute summaries
of the terms of the Company's capital stock (including the Stock) constitute
accurate summaries in all material respects of the terms of such capital stock.
(ix) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(x) The issue and sale of the shares of Stock being delivered on such
Delivery Date by the Company pursuant to the Underwriting Agreement, and the
execution, delivery and compliance by the Company and the Principal Subsidiaries
with all of the provisions of the Underwriting Agreement and the consummation of
the transactions contemplated by the Underwriting Agreement, will not result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, (i) any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel, or identified in an
officer's certificate of the Company as material, to which the Company or any of
the subsidiaries of the Company is a party or by which the Company or any of the
subsidiaries of the Company is bound or to which any of the property or assets
of the Company or any of the subsidiaries of the Company is subject (the
"Material Agreements"), which breach or default, as the case may be, is
reasonably likely to have a Material Adverse Effect, (ii) nor will such actions
result in any violation of the provisions of (A) the charter or by-laws of the
Company or any of the U.S. Subsidiaries or (B) to the best of our knowledge, (x)
any statute or any rule or regulation or (y) any order known to us, in each
case, of any court or governmental agency or body of the United States or the
State of New York, or established pursuant to the Delaware General Corporation
Law, having jurisdiction over the Company or any of the subsidiaries of the
Company or any of their respective properties or assets. Except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of the Underwriting Agreement by the Company and the Principal
Subsidiaries and the consummation by the Company of the transactions
contemplated thereby.
(xi) To the best of our knowledge, except as described in the
Prospectus, there are no contracts or agreements between the Company and any
person granting such person the right (other than rights which have been waived
or satisfied) to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
A-4
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act.
(xii) To the best of our knowledge, there are no legal or governmental
proceedings pending to which the Company or any of the subsidiaries of the
Company is a party or of which any property or assets of the Company or any of
its subsidiaries is the subject which questions the validity of the
Underwriting Agreement, including the ability of the Company or the Significant
Subsidiaries to execute and deliver the Underwriting Agreement, or which is
required to be disclosed in the Prospectus pursuant to Item 103 of Regulation S-
K promulgated by the Commission and, to the best of our knowledge, no such
proceedings are threatened by governmental authorities or others.
(xiii) Neither the Company nor any U.S. Subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraphs (vi) and (viii) above. In
the course of the preparation by the Company of the Registration Statement, and
the Prospectus (excluding the Exchange Act Documents), we participated in
conferences with certain officers and employees of the Company, with
representatives of Deloitte & Touche LLP, independent auditors to the Company,
Ernst & Young LLP, independent auditors to TresCom International, and KPMG LLP,
independent auditors to Telegroup, Inc., and with the Representatives and their
legal counsel. Based upon our examination of the Registration Statement, the
Prospectus and the Exchange Act Documents, our investigations made in connection
with the preparation of the Registration Statement and the Prospectus and our
participation in the conferences referred to above, we hereby advise you that we
have no reason to believe that the Registration Statement, as of its effective
date (including the Exchange Act Documents on file with the Commission on such
effective date), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (including
the Exchange Act Documents) contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that in each case we express no belief with respect to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Prospectus or the
Exchange Act Documents.
EXHIBIT B
[LETTERHEAD OF XXXXXXX BERLIN SHEREFF XXXXXXXX, LLP]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Based upon and limited to such examination and subject to the
assumptions and qualifications set forth in this letter, it is our opinion as of
the date hereof that:
(i) (A) The execution and delivery of the Underwriting Agreement by the
Company and PTI and the issue and sale of the Stock contemplated thereby do not
violate (1) the Communications Act, (2) any rules or regulations of the FCC
applicable to the Company, to PTI and/or to TresCom U.S.A. Inc. ("TresCom"), (3)
any State Telecommunications Laws applicable to the Company, to PTI and/or to
TresCom, and (4) to the best of our knowledge, any decree from any court, and
(B) no authorization of or filing with the FCC or any State Regulatory Agency is
necessary for the execution and delivery of the Underwriting Agreement by the
Company and PTI and the issue and sale of the Stock contemplated thereby in
accordance with the terms thereof;
(ii) Each of PTI and TresCom is a nondominant carrier authorized by
the FCC to provide domestic interstate interexchange telecommunications services
pursuant to 47 C.F.R. (S) 63.07(a) (1997) without any further order, license,
permit or other authorization by the FCC. Each of PTI and TresCom has been
granted Section 214 authority by the FCC to provide international message
telecommunications services and private line services through the resale of
international switched voice and private line services and/or by using its own
facilities and has on file with the FCC tariffs applicable to its domestic
interstate and international services;
(iii) Each of PTI and TresCom is certified, registered or otherwise
authorized, or is not required to obtain authority to resell intrastate
interexchange telecommunications services
B-2
in all U. S. states except Hawaii and Alaska. Each of PTI and TresCom has a
tariff on file in each of the states in which a tariff is required to be filed;
(iv) Except as set forth in the Certificate (A) each of PTI and
TresCom (1) to the best of our knowledge has made all reports and filings, and
paid all fees, required by the FCC and the State Regulatory Agencies except for
those reports and filings the failure to file of which, and those fees the
failure to pay of which, would not have a material adverse effect on the
financial condition, the earnings, business or operations of PTI or TresCom; and
(2) based on our understanding of PTI and TresCom's respective operations from
the Certificate, has all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from (the "Authorizations"), and
has made all filings and registrations with, the FCC and the State Regulatory
Agencies necessary to own, lease, license and use its properties and assets and
to conduct its business in the manner described in the Prospectus except for
those Authorizations the failure to obtain of which, and those filings and
registrations the failure to file of which, would not have a material adverse
effect on the financial condition, or the earnings, business or operations of
PTI or TresCom, as the case may be; and (B) to the best of our knowledge,
neither PTI nor TresCom has received any notice of proceedings relating to the
revocation or modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or rejection of any
such filing or registration, the effect of which, singly or in the aggregate,
would have a material adverse effect on the financial condition, the earnings,
business or operations and its subsidiaries taken as a whole;
(v) To the best of our knowledge, neither the Company, PTI nor
TresCom is in violation of, or in default under the Communications Act or State
Telecommunications Laws, the effect of which, singly or in the aggregate, would
have a material adverse effect on the financial condition, the earnings,
business or operations of the Company and its subsidiaries, taken as a whole;
(vi) To the best of our knowledge, and except as set forth in the
Certificate, (A) as of the date hereof, no decree or order of the FCC or any
State Regulatory Agency is outstanding against the Company or any of its
subsidiaries and (B) except as set forth in the Certificate, no litigation,
proceeding, inquiry or investigation has been commenced or threatened and no
notice of violation or order to show cause has been issued, against the Company
or any of its subsidiaries before or by the FCC or any State Regulatory Agency;
and
(vii) The statements in the Prospectus under the captions "Risk Factors
- We are subject to potential adverse effects of regulation"; "Business -
Industry Overview - Regulatory and Competitive Environment"; and "Business -
Government Regulation - United States", insofar as such statements constitute a
summary of the legal matters, documents or proceedings of the FCC and State
Regulatory Agencies with respect to telecommunications regulation referred to
therein, are accurate in all material respects and fairly summarize all such
matters referred to therein.
B-3
The opinions expressed in this letter are subject in all respects to
the following qualifications: (1) this opinion speaks only to the transactions
that are being consummated on the date hereof and does not address any
transaction that may take place after the Delivery Date; (2) any action that
would transfer de facto (actual) or de jure (legal) control of the Company, PTI
or TresCom is subject to the requirement for prior approval from the FCC and/or
State Regulatory Agencies; (3) no opinion is rendered as to matters not
specifically referred to herein or to events which have not yet occurred and
under no circumstances are you to infer from anything stated or not stated
herein any opinion with respect to such matters; and (4) all opinions expressed
in this letter are limited solely to the effect on the telecommunications
business of the Company, PTI or TresCom of the Communications Act and State
Telecommunications Laws, and we express no opinion as to the effect of any other
federal, state, local, foreign, supranational, regional statute or equitable
doctrine, common law or other legal requirement.
Other than as expressly stated in paragraphs one (i) through seven
(vii), no opinion is rendered as to the compliance of the Company, PTI or
TresCom in the past or in the future with any or all conditions or other
requirements of the FCC and the State Regulatory Agencies contained in the
orders, if any, authorizing the operations of the Company, PTI and/or TresCom or
otherwise imposed by statute, rule, regulation or policy, and we assume no
obligation to ensure that the Company, PTI and TresCom comply with such
conditions or requirements. We are admitted to the District of Columbia Bar and,
with respect to any matters concerning the State Telecommunications Laws, we
draw your attention to the fact that the members of the firm involved in the
preparation of this opinion letter, although generally familiar with the State
Telecommunication Laws, are not admitted to the Bars of the states in which the
State Regulatory Agencies are located and are not experts in the laws of those
jurisdictions.
EXHIBIT C
[LETTERHEAD OF RAKISONS SOLICITORS]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED ("the Company")
1. We are giving this opinion to you at the request of our client, the
Company, in connection with the underwriting agreement, dated October [__],
1999 (the "Underwriting Agreement"), between the Company and you, as
Representatives of the several Underwriters listed on Schedule 1 to the
Underwriting Agreement, relating to the underwriting of the issue of an
aggregate shares of the Company's common stock, par value $.01 per
share (the "Common Stock").
2. For the purpose of this opinion we have examined the following:
(a) a copy of the Prospectus, dated October [__], 1999 of the Company (the
"Final Prospectus");
(b) a copy of the memorandum and articles of association of Primus
Telecommunications Limited (registered in England and Wales under
number 2937312) whose registered office is at 0 Xxxxxxxx Xxxxxx,
Xxxxxx, XX0X 0XX ("PTL");
(c) a microfilmed copy of the file records in respect of PTL maintained at
the Company's Registration Office in England and Wales and available
for public inspection obtained on October [__], 1999;
C-2
(d) the ISVR Licence (as defined below);
(e) the IFL License (as defined below); and
(f) certificates from Xxxx X. Xxxxxx and Xxx Xxxxxxxxxxx in the forms
annexed to this letter.
3. On October [ ] 1999, we carried out a company search at the Companies
Registration Office, London in respect of PTL. We have not conducted any
further such searches since such date. On October [ ] 1999, we carried out
a search of the petitions pending at the Central Registry of Winding-Up
Petitions in London in respect of PTL. Our search on such date did not
reveal the filing of any winding-up order or resolution in respect of PTL
or the filing of any appointment of an administrator of PTL.
4. Except as stated above, we have not examined any contracts, instruments or
other documents entered into by or affecting the Company or any of its
subsidiaries or any corporate records of the Company or any of its
subsidiaries and we have not made any other enquiries concerning the
Company or any of its subsidiaries.
5. We have not made any investigations of the laws of any jurisdiction other
than of England and Wales, the regime and procedures of "French Telecoms
Law" and the "EC Directives" (as those terms are defined below and are
collectively referred to below as "Relevant Laws"). In particular, we have
made no investigation of laws of the State of New York and/or the United
States of America as a basis for any of the opinions expressed in this
letter, and we do not express or imply any opinion on the laws of any
jurisdiction other than the Relevant laws.
6. In rendering this opinion, we have assumed (and have taken no steps to
verify independently):
(a) the genuineness of all signatures and seals and the authenticity and
completeness of all documents purporting to be originals;
(b) the conformity to originals of all documents supplied to us as
certified or photostatic or facsimile transmitted copies and the
authenticity and completeness of the originals of such documents;
(c) that the information disclosed by our searches mentioned in paragraph 3
above in relation to PTL was then accurate and has not since altered;
that such searches did not fail to disclose any information which had
been delivered for registration but did not appear on the respective
files in London at the time of our searches; that PTL has not passed a
voluntary winding-up resolution; that no petition has been presented or
order made by a court for the winding-up, dissolution or
C-3
administration of PTL; and that no receiver, trustee, administrator or
similar officer has been appointed in relation to PTL or any of PTL's
assets or revenues;
(d) that there have been no amendments to the memorandum and articles of
association of PTL referred to in paragraph 2(b) above;
(e) that no event has occurred, action been taken or documents filed, which
would, when filed with the Registrar of Companies in England and Wales,
result in the alteration of the microfilmed copy of the files of
records in respect of PTL referred to in paragraph 2(c) above in a
manner which would affect this opinion.
7. Based on and subject to the foregoing and subject to the reservations
stated in paragraphs 8 and 9 below and to any matters not disclosed to us,
we are of the opinion that:
(a) PTL has been duly incorporated and is validly existing as a private
limited company under the laws of England and Wales and has the
corporate power and authority under such laws to own its property;
(b) PTL has all necessary approvals, being:
(i) a license issued by or on behalf of the Secretary of State for
Trade and Industry (the "Secretary of State") dated 31 December
1997 issued under Section 7 of the Telecommunications Xxx 0000
("1984 Act") relating to the provision of international simple
voice resale services (the "ISVR License"); and
(ii) a license issued by or on behalf of the Secretary of State dated
18 December 1996 issued under Section 7 of the 1984 Act relating
to the provision of international facilities-based services (the
"IFL License"),
to conduct its business in the United Kingdom in the manner described
in the Final Prospectus and no other licenses, designations, and/or
specifications are required from any other governmental entity in the
United Kingdom for PTL to conduct its business in the United Kingdom in
the manner described in the Final Prospectus;
(c) to the best of our knowledge and belief, each of the ISVR License and
IFL License are in full force and effect and there is no pending or
existing notice of proceedings relating to revocation or modification
of either the ISVR License or the IFL License which would have a
material adverse effect on PTL;
(d) the descriptions in the Final Prospectus of current statutes of the
United Kingdom ("UK") relating to telecommunications, and the
respective rules and regulations promulgated thereunder (collectively,
"UK Communications Law"), including,
C-4
without limitation, the 1984 Act and the statements in the Final
Prospectus discussing matters related to UK Communications Law under
the captions "Risk Factors--We are subject to potential adverse
effects of regulation" and "Business--Government Regulation", are
accurate in all material respects and fairly summarize all matters
described therein insofar as they related to UK Communications Law;
(e) to the best of our knowledge and belief, PTL is not in violation of or
in default of any provision of the 1984 Act or any regulation or order
made under that Act;
(f) to the best of our knowledge and belief, PTL has not been issued with
any notification by the Commission of the European Communities
informing it that it is in breach of any applicable provision of
European law as established under the Treaty of Rome as it relates to
the provision of telecommunications services; and
(g) the descriptions in the Final Prospectus of current law of the European
Union relating to telecommunications, in the form of Directives
promulgated by the European Commission ("the Commission") and the
Council of Ministers of the European Union ("the Council")
(collectively, "the EC Directives") and the statements in the Final
Prospectus discussing matters related to the EC Directives under the
caption "Business--Government Regulation", are accurate in all
material respects and fairly summarize all matters described therein
insofar as they relate to the EC Directives; and
(h) the description in the Final Prospectus relating to the current French
licensing regime for the granting of L34.1 and L33.1 licenses and
interconnection procedures (collectively, "French Telecoms Law") under
the caption "Business--Government Regulation" is accurate in all
material respects and fairly summarizes such regime and procedures.
8. This opinion is given solely in respect of the date hereof and on the basis
that it is to be governed by and construed in accordance with the laws of
England and Wales.
9. This opinion is addressed solely to you for your own us and benefit in
connection with the Underwriting Agreement and may not be disclosed to or
relied upon by anyone else without our express written consent.
Yours faithfully
EXHIBIT D
[LETTERHEAD OF XXXXXXX & COMPANY]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Based upon our investigations and (in relation to paragraphs 3 and 5)
our opinion of the laws of Australia, we are able to say:
1. PRIMUS TELECOMMUNICATIONS (AUSTRALIA) PTY., LTD. ACN 000 000 000
1.1 Primus Aust is a wholly-owned subsidiary of Primus Telecommunications
International, Inc. ("Primus International").
1.2 We are instructed that Primus Aust conducts the business of providing
local, domestic and international long distance, mobile, voice, data,
facsimile, enhanced facsimile, calling card, debit card and prepaid card,
and ISDN carriage telecommunications services to business and residential
customers through direct sales force, dealerships, agents, resellers,
associations, affinity groups, direct marketing and others and providing
voicemail equipment to carriers, in Australia and that Primus Aust only
does business in Australia.
2. PRIMUS TELECOMMUNICATIONS PTY. LTD. ACN 000 000 000
2.1 Primus Tel is a wholly-owned subsidiary of Primus Telecommunications Group,
Incorporated ("Primus").
2.2 We are instructed that Primus Tel conducts the business of providing
domestic and international long distance, voice, data, facsimile, enhanced
facsimile, calling card, debit card and prepaid card carriage
telecommunications services to businesses and residential
D-2
customers through direct sales force, dealerships, agents, resellers,
associations, affinity groups, direct marketing and others and providing
voicemail equipment to carriers, in Australia and that Primus Tel only does
business in Australia.
3. ECLIPSE TELECOMMUNICATIONS, PTY. LTD. ACN 069 554 383
3.1 Eclipse is wholly-owned subsidiary of Primus International.
3.2 We are instructed that Eclipse conducts the business of providing domestic
and international data telecommunications services to business customers,
in Australia and that Eclipse only does business in Australia.
4. HOTKEY INTERNET SERVICES PTY. LTD. ACN 075 759 821
4.1 Hotkey is a subsidiary of Primus International; Primus International owns
all ordinary shares issued by Hotkey.
4.2 We are instructed that Hotkey conducts the business of providing internet
services to business and residential customers in Australia and that Hotkey
only does business in Australia.
5. INCORPORATION, STANDING AND POWER & AUTHORITY
5. l Each of Primus Aust, Primus Tel, Eclipse and Hotkey:
(a) has been duly incorporated; and
(b) is validly existing as a corporation in good standing under the laws
of, in the case of Primus Aust and Hotkey, Victoria and, in the case
of Primus Tel and Eclipse, New South Wales; and
(c) has all necessary power and authority to own or hold its properties
and conduct the business in which it is engaged in Australia.
5.2 The Underwriting Agreement has been duly authorized, executed and
delivered by Primus Aust and Primus Tel.
6. AUTHORIZATIONS TO CONDUCT BUSINESS AND COMPLIANCE WITH LAWS
Each of Primus Aust, Primus Tel, Eclipse and Hotkey:
(a) has all necessary certificates, orders, permits, licenses,
authorizations, consents and approvals of and from and has made all
declarations and filings with, all Australian governmental
authorities, all self-regulatory organizations and all courts and
tribunals to own, lease, license and use its properties and assets and
to conduct its business in the manner described in the Prospectus;
(b) has not received any notice of proceedings relating to revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals;
D-3
(c) is not in violation of, or in default under, any federal, state or
local law, regulation, rule, decree, order or judgment applicable to
it, the effect of which, singly or in the aggregate, would have a
material adverse effect on the prospects, condition, financial or
otherwise, or on the earnings, business or operations of Primus and
its subsidiaries, taken as a whole, except as described in the
Prospectus.
7. REGULATORY ENVIRONMENT
The statements in the Prospectus under the captions:
* "Risk Factors - We are subject to potential adverse effects of
regulation" and
* "Business - Government Regulation"
in each case insofar as such statements constitute summaries of the
Australian legal matters, documents or proceedings referred to therein, are
accurate in all material respects and fairly summarize all matters referred
to therein.
8. RESTRICTIONS ON REPATRIATION OF FUNDS
There are no restrictions (legal, contractual or otherwise) on the ability
of Primus Aust, Primus Tel, Eclipse and Hotkey to declare and pay any
dividends or on the ability of Primus Aust, Primus Tel and Eclipse to make
any payment or transfer of property or assets to its stockholders other
than those described in the Prospectus and such restrictions as would not
have a material adverse effect on the prospects, condition, financial or
otherwise, or on the earnings, business or operations of Primus and its
subsidiaries, taken as a whole; and such descriptions, if any, fairly
summarize such restrictions.
9. LITIGATION
Each of Primus Aust, Primus Tel, Eclipse and Hotkey is not aware of any
actual or pending legal proceedings in which it is a party or which is
threatened against it that would be likely, if successful, to have a
material adverse effect on Primus' business, financial condition or results
of operations.
EXHIBIT E
[LETTERHEAD OF OSLER, HOSKIN, & HARCOURT]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
On the basis of the foregoing, and subject to the qualifications
hereinafter expressed, we are of the opinion that:
(i) The statements in the Prospectus under the captions "Risk Factors--We
are subject to potential adverse effects of regulation," and
"Business-Government Regulation-Canada", in each case insofar as such
statements describe or summarize matters of law or constitute legal
conclusions, fairly describe or summarize all matters referred to therein;
and
(ii) Primus and its subsidiaries have all necessary certificates, orders,
permits, licenses, authorizations, consents and approvals of and from, and
have made all necessary declarations and filings with, Canadian
governmental authorities and all Canadian courts as required pursuant to
the Telecommunications Act (Canada) to conduct their business as described
in the Prospectus.
EXHIBIT F
[LETTERHEAD OF XXXXXXX, XXXXXXXX & XXXXXXXX]
October [ ], 1999
Xxxxxx Brothers Inc.,
Xxxxxx Xxxxxxx & Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters named in Schedule I thereto,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
We have acted as special Canadian counsel to 3362426 Canada Inc.
("Primus Canada"), carrying on business as Primus Telecommunications Canada, in
connection with the execution and delivery by Primus Telecommunications Group,
Incorporated of the Underwriting Agreement dated October [ ], 1999 (the
"Underwriting Agreement") by and among Primus and you, as representatives (the
"Representatives") of the other Underwriters listed on Schedule I attached
thereto (the "Underwriters"), relating to aggregate shares of the
Company's Common Stock, par value $.01 per share (the "Stock"). This opinion is
delivered to you pursuant to Section 8(k) of the Underwriting Agreement.
Capitalized terms used herein but not otherwise defined have the meanings
ascribed to them in the Underwriting Agreement.
In connection with the opinions set out below, we have also examined:
(a) the articles and by-laws of Primus Canada
(b) a certificate of compliance dated October [ ], 1999 issued in
respect of Primus Canada pursuant to the Canada Business
Corporations Act (the "Certificate of Compliance") and attached
as Schedule I to this opinion letter;
(c) such other records and documents as we have considered necessary
for the purposes of the opinions expressed herein.
Assumptions and Reliance
------------------------
For purposes of the opinions set out below, we have:
(a) with respect to all documents examined by us, assumed the
genuineness of all signatures on and the authenticity of each
document submitted to us as an original and the conformity to the
authentic original document of each document we have examined as
a certified, conformed facsimile or photostatic copy;
(b) relied exclusively upon the Certificate of Compliance with
respect to the accuracy of all factual matters contained therein,
all the contents of which we assume continue to be accurate on
the date of this opinion letter; and
(c) we have assumed that the Shareholders' Ledger of Primus Canada is
accurate and correct and we have relied on same in providing the
opinion in paragraph 2 of this opinion letter.
Law
---
Our opinions set out below are limited to the laws of the Province of
Ontario and the federal laws of Canada applicable therein as of the date of this
opinion letter. In connection with the opinions set out below, we have
considered such matters of law as we consider necessary and appropriate. This
opinion is limited solely to matters governed by the laws of Canada.
Opinions
--------
Based upon and relying on the foregoing and subject to the
assumptions, qualifications and limitations set forth in this opinion letter, we
are of the opinion that:
1. Primus Canada is a corporation incorporated under the federal laws of
Canada and has not been dissolved as of October [ ], 1999 and has all the
corporate power and corporate authority necessary: (i) to own or hold its
property; and (ii) to conduct its business which it is currently engaged; in the
Province of Ontario.
2. The Shareholders' Ledger of Primus Canada indicates that 1,000 common
shares of Primus Canada are registered in the name of Primus Telecommunications
International, Inc. and such shares have been duly and validly authorized and
issued and are fully paid.
EXHIBIT G
[LETTERHEAD OF BRUCKHAUS XXXXXXXX XXXXXX XXXXX]
We are of the opinion that:
(1) the descriptions in the Prospectus given under the captions "Risk Factors -
We are subject to potential adverse effects of regulation" and "Business -
Government Regulation - Germany" of the German Telecommunications Act of
July 25, 1996 and the respective rules and regulations promulgated
thereunder (collectively, the "German Telecommunications Law") are accurate
in all material respects and fairly summarize all matters described
therein.
(2) Primus Germany is the holder of a license of license class 4 issued by the
German Regulator dated February 17, 1998 under Section 8 in connection with
Section 6 para. 2 no. 2 of the German Telecommunications Act of 1996,
relating to the provision of voice telephony services on the basis of self-
operated telecommunications networks in Germany;
(3) (A) German Telecommunications law does not regulate the issuing of debt
instruments by telecommunications operators active within the German
jurisdiction or their parent companies; (B) no authorization of or filing
with the German Regulator is necessary for the execution and delivery of
the Underwriting Agreement by the Company and the consummation of the
transactions (including, without limitation, issuance of the Stock)
contemplated thereby in accordance with the terms thereof;
(4) (A) To our knowledge and with the exceptions reported hereafter, Primus
Germany has all certificates, orders, permits, licenses, authorizations,
consents and approvals necessary to own, lease, license and use its
properties and assets and to conduct its business in the manner described
in the Prospectus; and (B) to our knowledge and with the exceptions
reported hereafter, Primus Germany has not received any notice of
proceedings relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, or the qualification or rejection of any such filing or
registration, the effect of which, singly or in the aggregate, would have a
material adverse effect on the prospects, conditions, financial or
otherwise, or on the earnings, business or operations of the Company and
its subsidiaries taken as a whole; we advise you, however, that the German
Regulator may change requirements for a license class 4 covering Germany-
wide origination and termination services for long distance operators and
Primus Germany may, therefore, in the future be required to extend its
current license and may have to pay additional license fees;
(5) to our knowledge, (A) Primus Germany is conducting its business in
accordance with the license of license class 4 issued by the German
Regulator on February 17, 1998; and (B) Primus Germany is not in violation
of or in default under the German Telecommunications Law, the effect of
which, singly or in the aggregate, would have a material adverse effect on
the prospects,
G-2
condition, financial or otherwise, or on the earnings, business or
operations of the Company and its subsidiaries, taken as a whole; and
(6) to our knowledge, (A) no decree or order of the German Regulator has been
issued against Primus Germany; (B) no litigation, proceeding, inquiry or
investigation has been commenced or threatened, and no notice of violation
or order to show cause has been issued, against Primus Germany before or by
October [ ], 1999.
General Qualifications
(a) While we have been representing and advising Primus Germany regarding
individual projects (e.g. incorporation of Primus Germany and
interconnection agreement with Deutsche Telekom AG), we are not
involved in Primus Germany's day-to-day business operations and are,
therefore, not fully informed of the current state of Primus Germany's
business activities. This applies in particular to the effects of the
TelePassport/USFI Acquisition (transfer of German customer base to
Primus Germany), to Primus Germany's re-origination (call back)
service activities and carrier wholesale service activities.
(b) This opinion is confined to German law in force at the date hereof and
as currently applied by German courts and the German Regulator; and we
do not express or imply an opinion as to matters other than under
German law. We assume no obligation to advise you of facts,
circumstances, events or legal developments which hereafter may be
brought to our attention and which may alter, affect or modify the
opinion expressed herein.
EXHIBIT H
[LETTERHEAD OF NAGASHIMA & OHNO]
1. The descriptions in the Prospectus of the matters in connection with the
Telecommunications Law, and the respective rules and regulations promulgated
thereunder (collectively, the "Japanese Communications Law") under the
caption "Risk Factors-We are subject to potential adverse effects of
regulation" and under "Business--Government Regulation--Japan" are accurate
in all material respects and fairly summarize all matters described therein;
2. Primus Telecommunications obtained Registration as of December 11, 1997,
relating to the provision of international telecommunications services in
Japan, and the Registration has not been modified, except for the
modification as of January 26, 1998 as to the corporate name and the
representative director to reflect the current corporate name and the
representative director of Primus Telecommunications, or revoked, as of the
date hereof;
3. (A) The execution and delivery of the Underwriting Agreement by the Company,
and the consummation of the transactions (including, without limitation,
issuance of the Stock) contemplated thereby do not violate (1) the Japanese
Communications Law, (2) any rules or regulations of the MPT applicable to
the Japanese Subsidiaries or (3), to our knowledge, any telecommunications
related decree from any Japanese court, and (B) no authorization of or
filing with the MPT is necessary for the execution and delivery of the
Underwriting Agreement by the Company and the consummation of the
transactions (including, without limitation, issuance of the Stock)
contemplated thereby in accordance with the terms thereof;
4. (A) Primus Telecommunications has all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from the MPT
necessary to conduct its business in the manner described in the Prospectus;
and (B) neither of the Japanese Subsidiaries has received any notice of
proceedings relating to the cancellation, revocation or modification of the
Registration, the effect of which, singly or in the aggregate, would have a
material adverse effect on the prospects, condition, financial or otherwise,
or in the earnings, business or operations of the Japanese Subsidiaries,
taken as a whole;
5. (A) Primus Telecommunications is currently conducting its business in
accordance with the Registration and (B) to our knowledge, the current
activities of the Japanese Subsidiaries are not in violation of or in
default under the Japanese Communications Law, the effect of which, singly
or in the aggregate, would have a material adverse effect on the prospects,
condition, financial or otherwise, or in the earnings, business or
operations of the Japanese Subsidiaries, taken as a whole; and
H-2
6. (A) no decree or order of the MPT has been issued against any of the
Japanese Subsidiaries; (B) no litigation, proceeding, inquiry or
investigation has been commenced or threatened, and no notice of violation
or order to show cause has been issued, against any of the Japanese
Subsidiaries before or by a Japanese court or the MPT and (C) to our
knowledge, there are no rulemakings or other administrative proceedings
pending before the MPT, (i) which are generally applicable to
telecommunications services and (ii) which, if decided adversely to the
interest of any of the Japanese Subsidiaries, would have a material adverse
effect on the Japanese Subsidiaries, taken as a whole.
EXHIBIT I
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.,
Xxxxxx Stanley& Co. Incorporated,
CIBC World Markets Corp.,
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated,
Xxxxxxxx & Company, Inc.,
Xxxxx & Xxxxxxxxxxxx, Inc., and
Xxxxxxx Bros., L.P.,
As Representatives of the several
Underwriters,
c/x Xxxxxx Brothers Inc.
Three World Financial Center
New York New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose
to enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of common stock, par value $0.01 per share (the "Common Stock"), of
Primus Telecommunications Group, Incorporated, a Delaware corporation (the
"Company"), and that the Underwriters propose to reoffer the Shares to the
public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. and Xxxxxx Xxxxxxx & Co. Incorporated (the "Joint Book-Running
Managers"), on behalf of the Underwriters, the undersigned will not, directly or
indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter
into any transaction or device that is designed to, or could be expected to,
result in the disposition by any person at any time in the future of) any shares
of Common Stock (including, without limitation, shares of Common Stock that may
be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and shares of
Common Stock that may be issued upon exercise of any option or warrant) or
securities convertible into or exchangeable for Common Stock or substantially
similar securities [(other than the sale of shares of Common Stock issued upon
exercise of any option existing on the date of the Underwriting Agreement to the
extent the proceeds of such sale
are used to pay tax obligations incurred in connection with such exercise)]*,
(2) sell or grant options, rights or warrants with respect to any shares of
Common Stock or securities convertible or exchangeable for Common Stock or
substantially similar securities or (3) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1), (2) or (3) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, for a period
of 90 days after the effective date of the Registration Statement relating to
the Offering; provided, however, that the undersigned may dispose of shares of
Common Stock or securities convertible into or exchangeable for Common Stock,
without the prior written consent of the Joint Book-Running Managers, as bona
fide gifts so long as the recipient of such gift agrees in writing, at or prior
to the time of the making of such gift, to be bound by the terms of this Lock-Up
Letter Agreement with respect to the transferred securities.
In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant
to an Underwriting Agreement, the terms of which are subject to negotiation
between the Company and the Underwriters.
-----------------
* Language in brackets to be used in connection with the Lock-Up Letter
Agreements of Xxxx Xxxxxx and Xxx Xxxxxxxxxx only.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:_________________________________
Name:
Title:
Dated:__________________________
