EXHIBIT 10.22
$150,000,000
PRIMUS TELECOMMUNICATIONS
GROUP, INCORPORATED
9 7/8% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
Xxxxxx Brothers Inc. May 14, 1998
As Representative of the Initial
Purchasers named in Schedule I,
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Primus Telecommunications Group, Incorporated, a Delaware corporation
(the "Company") , proposes to sell to you (the "Representative") and the other
------- --------------
purchasers named in Schedule I hereto (collectively, the "Initial Purchasers")
------------------
$150,000,000 aggregate principal amount of the Company's 9 7/8% Senior Notes due
2008 (the "Notes"). The Notes will be issued pursuant to an Indenture to be
-----
dated as of May 19, 1998 (the "Indenture"), between the Company and First Union
---------
National Bank, as trustee (the "Trustee"). This is to confirm the agreement
-------
concerning the purchase of the Notes from the Company by the Initial Purchasers.
Capitalized terms used but not defined in this Agreement shall have the meaning
given to such terms in the Indenture.
The Company has entered into an Agreement and Plan of Merger dated as
of February 3, 1998 (the "TresCom Merger Agreement") to acquire all of the
outstanding shares of TresCom International Inc. ("TresCom") in exchange for
shares of common stock, par value $.01 per share of the Company (the "TresCom
Merger"). The TresCom Merger is subject to the satisfaction or waiver of certain
conditions and, accordingly, there can be no assurance that the TresCom Merger
will be completed on the terms and conditions set forth in the TresCom Merger
Agreement, or at all. As used herein, the term "subsidiary" of any company means
any other entity at least 51% of the ownership interests of which are owned,
directly or indirectly, by such Company.
2
The Notes will be offered without being registered under the
Securities Act of 1933, a s amended (the "Securities Act"), in reliance on
--------------
exemptions therefrom.
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement, to be dated the
Closing Da te (as defined herein) (the "Registration Rights Agreement") among
-----------------------------
the Company and the Initial Purchasers, to be substantially in the form attached
hereto as Exhibit G.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will prepare
----------------------
a final offering memorandum (the "Memorandum") setting forth or including a
----------
description of the terms of the Notes, the terms of the offering, a description
of the Company and any material developments relating to the Company occurring
after the date of the most recent financial statements included therein.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with the Initial Purchasers that,
as of the date hereof:
(a) The Memorandum at the date hereof, does not, and at the Closing
Date, will not, contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this Section
l(a) do not apply to statements or omissions in the Memorandum based upon
information furnished to the Company in writing by or on behalf of the
Initial Purchasers expressly for use therein.
(b) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Sections 3 and 6 of this Agreement, it
is not required by applicable law or regulation in connection with the
offer, sale and delivery of the Notes to you in the manner contemplated by
this Agreement and the Memorandum to register the Notes under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
-------------------
(c) (i) The Company, and each of the subsidiaries 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
3
taken as a whole, and each has all 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. and Primus Telecommunications (Australia) Pty. Ltd.
(collectively, the "Significant Subsidiaries")) is a "significant subsidiary,"
------------------------
as such term is defined in Rule 405 of the Rules and Regulations (as defined
below) and (ii) TresCom, and each of the subsidiaries of TresCom, has been
duly organized and is validly existing and in good standing under the laws of
their respective jurisdiction 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 result in a material adverse
effect on the business or property of the combined entity consisting of both
(i) the Company and its subsidiaries and (ii) TresCom and its subsidiaries,
taken as a whole, and each has all power and authority necessary to own or
hold its respective properties and to conduct the business in which it is
engaged.
(d) The Company has an authorized capitalization as set forth in the
Memorandum, 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; 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 (except
for those described in the Memorandum).
(e) The Indenture has been duly authorized and, when duly executed by
the proper officers of the Company (assuming due execution and delivery by the
Trustee) and delivered by the Company, will constitute a valid and legally
binding agreement of the Company enforceable against the Company in accordance
with its terms, except (i) where the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to rights of creditors
and other obligees generally, (ii) where the remedy of specific performance
and other forms of equitable relief may be subject to certain equitable
defenses and principles and to the discretion of the court before which the
proceedings may be brought and (iii) for the waiver of rights and defenses
contained in Sections 111 and 514 of the Indenture.
(f) This Agreement has been duly authorized, executed and delivered
by the Company.
(g) The Registration Rights Agreement has been duly authorized by the
Company, and when duly executed by the proper officers of the Company
(assuming due
4
execution and delivery by the Initial Purchasers) and delivered by the
Company, will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
except (i) where the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to rights of creditors and
other obligees generally, (ii) where the remedy of specific performance and
other forms of equitable relief may be subject to certain equitable
defenses and principles and to the discretion of the court before which the
proceedings may be brought and (iii) where rights to indemnity and
contribution thereunder may be limited by applicable law and public policy.
(h) The Notes have been duly authorized and, when executed by the
Company, authenticated by the Trustee and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will be
(x) valid and binding obligations of the Company enforceable in accordance
with their terms, except (i) where the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
rights of creditors and other obligees generally, (ii) where the remedy of
specific performance and other forms of equitable relief may be subject to
certain equitable defenses and principles and to the discretion of the
court before which the proceedings may be brought, and (iii) for the waiver
of rights and defenses contained in Sections 111 and 514 of the Indenture
and (y) entitled to the benefits of the Indenture and the Registration
Rights Agreement.
(i) The execution, delivery and performance by the Company of this
Agreement, the Registration Rights Agreement, the Indenture and the Notes,
and the consummation by the Company of the transactions contemplated in
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 order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, any of the subsidiaries of the Company or
any of their properties or assets and (iv) except for such consents,
approvals, authorizations, registrations or qualifications as may be
required under applicable state securities laws in connection with the
purchase and distribution of the Notes by the Initial Purchasers, will not
require any consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body; provided,
however, that the Company shall not be in
5
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 of the Company and the subsidiaries of the
Company taken as a whole (a "Material Adverse Effect").
-----------------------
(j) The execution, delivery and performance by TresCom of the Merger
Agreement, (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 TresCom or any of the subsidiaries of TresCom is a
party or by which TresCom or any of the subsidiaries of TresCom is bound or
to which any of the properties or assets of TresCom or any of the
subsidiaries of TresCom is subject, (ii) will not result in any violation
of the provisions of the charter or by-laws of TresCom or any of the
"significant subsidiaries" (as defined in Rule 405 of the Rules and
Regulations) of TresCom and (iii) will not result in any violation of any
statute or order, rule or regulation of any court or governmental agency or
body having jurisdiction over TresCom, any of the subsidiaries of TresCom
or any of their properties or assets; provided, however, that the Company
shall not be in breach of this representation where, with respect to
clauses (i) and (iii) 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 of the
combined entity consisting of the Company and its subsidiaries and TresCom
and its subsidiaries, taken as a whole (a "Combined Material Adverse
-------------------------
Effect").
------
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest quarterly financial statements included in the
Memorandum, 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 Memorandum; and, 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
Memorandum.
(l) The financial statements (including the related notes and
supporting schedules) included in the Memorandum 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
6
(except that the unaudited financial statements may exclude supporting
schedules and are subject to normal year-end adjustments).
(m) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report is included in the Memorandum and
who have delivered the initial letter referred to in Section 8(m) hereof,
are independent public accountants as required by the Securities Act and
the rules and regulations promulgated thereunder (the "Rules and
---------
Regulations") during the periods covered by the financial statements on
-----------
which they reported contained in the Memorandum.
(n) Ernst & Young LLP, who have certified certain financial
statements of USFI, Inc., whose report is included in the Memorandum and
who have delivered the initial letter referred to in Section 8(m) hereof,
are independent public accountants 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 Memorandum.
(o) Ernst & Young LLP, who have certified certain financial
statements of TresCom whose report is included in the Memorandum and who
have delivered the initial letter referred to in Section 8(m) hereof, are
independent public accountants 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 Memorandum.
(p) Each of the Company and TresCom and each of the subsidiaries of
the Company and TresCom 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 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,
in the case of failures or conflicts connected with the Company or its
subsidiaries, or a Combined Material Adverse Effect, in the case of
failures or conflicts connected with TresCom or its subsidiaries.
(q) Each of the Company and TresCom and each of the subsidiaries of
the Company and TresCom has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned
by it, 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 Memorandum or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company or
7
TresCom and each of the subsidiaries of the Company or TresCom, as
applicable. All real property and buildings held under lease by the Company
or TresCom and each of the subsidiaries of the Company or TresCom are held
by the Company or TresCom, respectively, under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company or TresCom and each of the subsidiaries of the
Company or TresCom.
(r) There are no legal or governmental proceedings pending to which
the Company or TresCom or any of the subsidiaries of the Company or TresCom
is a party or of which any property or asset of the Company or TresCom or
any of the subsidiaries of the Company or TresCom is the subject which, if
determined adversely to the Company or TresCom or any of the subsidiaries
of the Company or TresCom, could reasonably be expected to have a Material
Adverse Effect, in the case of proceedings involving the company or any of
its subsidiaries, or a Combined Material Adverse Effect, in the case of
proceedings involving TresCom or any of its subsidiaries; 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 Memorandum which are not so disclosed.
(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 would be
required to be disclosed in a Registration Statement filed with the
Commission under the Securities Act of 1933, as amended, which is not
disclosed in the Memorandum.
(t) Since the date as of which information is given in the Memorandum
through the date hereof, and except as may otherwise be disclosed in, or in
information incorporated by reference in, the Memorandum, the Company has
not (i) issued or granted any securities, other than in connection with any
employment contract, benefit plan or other similar 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, or TresCom, nor any of the subsidiaries of
the Company or TresCom, (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
8
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, in the case
of violations or defaults involving the Company and its subsidiaries, or a
Combined Material Adverse Effect, in the case of violations or defaults
involving TresCom and its subsidiaries, 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, in the
case as violations or failures by the Company or any of its subsidiaries,
or a Combined Material Adverse Effect, in the case of violations or
failures by TresCom or any of its subsidiaries.
(v) Neither the Company, or TresCom, or any of the subsidiaries of
the Company or TresCom, 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 TresCom or any of the subsidiaries of
the Company or TresCom, 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 or any subsidiary of the Company is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amen ded, and the rules and regulations of the
Securities and Exchange Commission (the "Commission") thereunder (the
----------
"Investment Company Act").
----------------------
(x) None of the Company or any of the affiliates of the Company
(each, as defined in Rule 501(b) of Regulation D under the Securities Act,
an "Affiliate") has directly, or through any agent (other than the Initial
---------
Purchasers in connection with this Agreement), (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act) which is or will be integrated with the
sale of the Notes in a manner that would require the registration under the
Securities Act of the Notes or (ii) engaged or will engage in any form of
general solicitation or general advertising in connection with the
offering, including, without limitation, making offers or sales of the
Notes in the United States of the Notes (as those terms are used in
Regulation D under the Securities Act), or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
9
(y) None of the Company, the Affiliates or any person acting on its
or their behalf (other than the Initial Purchasers in connection with this
Agreement) has engaged or will engage in any directed selling efforts (as
that term is defined in Regulation S under the Securities Act ("Regulation
----------
S")) with respect to the Notes and each of the Company and its Affiliates
-
and any person acting on its or their behalf (other than the Initial
Purchasers in connection with this Agreement) has complied and will comply
with the offering restrictions requirement of Regulation S.
(z) 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.
(aa) To the best of the knowledge of the Company, the representations,
warranties and agreements set forth in Section 3(g) of the TresCom Merger
Agreement are true and correct as of the date hereof.
2. Purchase of the Notes by the Initial Purchasers (a) On the
basis of the representations and warranties herein contained, and subject to the
terms and conditions hereinafter set forth, the Company agrees to sell to the
Initial Purchasers and the Initial Purchasers agree, severally and not jointly,
to purchase from the Company, the respective principal amount of the Notes set
forth in Schedule I hereto opposite their names at a purchase price of 100% of
the principal amount of such Notes.
(b) The Company shall not be obligated to deliver any of the Notes,
except upon payment for all of the Notes to be purchased as hereinafter
provided.
3. Sale and Resale of the Notes by the Initial Purchasers and
Representations and Warranties of the Initial Purchasers. (a) You have advised
the Company that you propose to offer the Notes for resale upon the terms and
conditions set forth in this Agreement and in the Memorandum. You hereby
represent and warrant to, and agree with, the Company that you (i) are
purchasing the Notes pursuant to a private sale exempt from registration under
the Securities Act without the intent to distribute the Notes in violation of
the Securities Act, (ii) will not solicit offers for, or offer or sell, the
Notes by means of any form of general solicitation or general advertising or in
any manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (iii) will solicit offers for the Notes only from, and will
offer, sell or deliver the Notes, as part of their initial offering, only to (A)
in the case of offers inside the United States, persons whom you reasonably
believe to be qualified institutional buyers ("Qualified Institutional Buyers")
------------------------------
as defined in Rule 144A under the Securities Act, as such rule may be amended
from time to time ("Rule 144A") or, if any such person is buying for one or more
---------
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to you that each such account is a
Qualified Institutional Buyer, to whom notice has been given that such sale or
delivery is being made in reliance on
10
Rule 144A, in each case, in transactions under Rule 144A, and (B) in the case of
offers outside the United States, to persons other than U.S. persons (as defined
in Regulation S) in accordance with Rule 903 of Regulation S.
(b) In connection with the transactions described in subsection
(a)(iii)(B) of this Section 3, you have offered and sold the Notes, and will
offer and sell the Notes, (i) as part of your distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date (the "Restricted Period"), only in accordance with Rule 903 of
-----------------
Regulation S. Accordingly, the Initial Purchasers represent and agree that,
with respect to the transactions described in subsection (a)(iii)(B) of this
Section 3, neither they, nor any of their Affiliates, nor any person acting on
their behalf has engaged or will engage in any directed selling efforts with
respect to the Notes, and that they have complied and will comply with the
offering restrictions of Regulation S. They agree that, at or prior to the
confirmation of sale of the Notes pursuant to subsection (a)(iii)(B) of this
Section 3, they shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Notes from the
Initial Purchasers during the Restricted Period, a confirmation or notice to
substantially the following effect:
The Notes covered hereby have not been registered under the U.S. Securities
Act of 1933 (the "Securities Act") and may not be offered or sold within
--------------
the United States or to, or for the account or benefit of U.S. Persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the time of
delivery of the Notes, except in either case in accordance with Regulation
S or Rule 144A under the Securities Act. The terms used above have the
meaning given to them by Regulation S.
(c) (i) You have not offered or sold and will not offer or sell any
Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers or Securities Regulations 1996 (the "Regulations"); (ii) you have
-----------
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by you in relation to the Notes
in, from or otherwise involving the United Kingdom; and (iii) you have only
issued or passed on and will only issue or pass on in the United Kingdom any
document received by you in connection with the issuance of the Notes to a
person who is of a kind described in Section 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.
4. Delivery of and Payment for the Notes. (a) Payment of the
purchase price for, and delivery of, the Notes shall be made at the offices of
Shearman & Sterling, New York, New York or at such other place as shall be
agreed upon by the Company and you, at 9:30 a.m.
11
(New York time), on May 19, 1998 or at such other time or date as you and the
Company shall determine (such date and time of payment and delivery being herein
called the "Closing Date").
------------
(b) On the Closing Date, payment for the Notes shall be made in
immediately available funds by wire transfer to such account as the Company
shall specify prior to the Closing Date or by such means as the parties hereto
shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be registered
in such names and in such denominations as you shall request in writing not less
than two full business days prior to the Closing Date. The certificates
evidencing the Notes shall be delivered to you on the Closing Date for the
respective accounts of the Initial Purchasers, with any transfer taxes payable
in connection with the transfer of the Notes to the Initial Purchasers duly
paid, against payment of the purchase price therefor. For the purpose of
expediting the checking and packaging of certificates evidencing the Notes, the
Company agrees to make such certificates available for inspection not later than
2:00 P.M. on the business day prior to the Closing Date.
5. Further Agreements of the Company. The Company further agrees:
(a) To furnish to you, without charge, during the period referred to
in paragraph (c) below, as many copies of the Memorandum and any
supplements and amendments thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the Memorandum,
the Company shall furnish a draft copy thereof to the Initial Purchasers
and counsel to the Initial Purchasers and will not effect any such
amendment or supplement to which the Initial Purchasers shall reasonably
object by notice to the Company after a reasonable period of review, which
shall not in any case be longer than [two] business days after receipt of
such draft copy.
(c) If, at any time prior to completion of the distribution of the
Notes by you to purchasers, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for you or
counsel for the Company, to amend or supplement the Memorandum in order
that the Memorandum will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances existing at the time
it is delivered to a purchaser, or if it is necessary to amend or
supplement the Memorandum to comply with applicable law, to promptly
prepare such amendment or supplement as may be necessary to correct such
untrue statement or omission or so that the Memorandum, as so amended or
supplemented, will comply with applicable law and to furnish you such
number of copies as you may reasonably request.
12
(d) So long as the Notes are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to furnish to holders of the Notes and prospective
------------
purchasers of Notes designated by such holders, upon request of such
holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) For a period of five years following the date of the Memorandum
to furnish to the Initial Purchasers copies of all public reports and all
reports and financial statements furnished by the Company to the principal
national securities exchange upon which the Notes may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Notes for offering and
sale under the securities laws of such jurisdictions as the Initial
Purchasers 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 Notes; 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 Notes, in any
jurisdiction where it is not now so subject. In each jurisdiction in which
the Notes 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 Initial Purchasers with such information as is necessary for the
determination of the legality of the Notes for investment under the laws of
such jurisdictions as the Initial Purchasers may reasonably request.
(g) Not to offer, sell, contract to sell or otherwise dispose of any
additional securities of the Company substantially similar to the Notes
(but not including the Exchange Notes (as defined in the Registration
Rights Agreement)) or any securities convertible into or exchangeable for
or that represent the right to receive any such similar securities, other
than either the Notes to be sold hereunder or securities issued upon
conversion, exchange or exercise of securities outstanding on the date of
this Agreement, without the consent of Xxxxxx Brothers (which consent will
not be unreasonably withheld) during the period beginning from the date of
this Agreement and continuing for 180 days following the Closing Date.
13
(h) To use its best efforts to permit the Notes to be designated
Private Offerings, Resales and Trading through Automated Linkages Market
("PORTAL") securities in accordance with the rules and regulations adopted
------
by the National Association of Securities Dealers, Inc. relating to trading
in the PORTAL Market and to permit the Notes to be eligible for clearance
and settlement through The Depository Trust Company ("DTC").
---
(i) Except following the effectiveness of the Registration Statement
(as defined in the Registration Rights Agreement), not to, and will cause
its respective Affiliates not to, solicit any offer to buy or offer to sell
the Notes by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities
Act) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.
(j) Not to, and will cause its respective Affiliates not to, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) in a transaction that
could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.
(k) To use reasonable best efforts to ensure that none of the Company
or any subsidiary of the Company shall become an "investment company"
within the meaning of such term under the Investment Company Act.
(l) None of the Company, the Affiliates of the Company or any person
acting on its or their behalf (other than the Initial Purchasers in
connection with this Agreement) will engage in any directed selling efforts
(as that term is defined in Regulation S) with respect to the Notes, and
each of the Company and the Affiliates of the Company and each person
acting on its or their behalf (other than the Initial Purchasers in
connection with this Agreement) will comply with the offering restrictions
of Regulation S.
6. Offering of Notes; Restrictions on Transfer. (a) Each Initial
Purchaser, severally and not jointly, represents and warrants that such Initial
Purchaser is a Qualified Institutional Buyer. Each Initial Purchaser, severally
and not jointly, agrees with the Company that (i) it will not solicit offers
for, or offer to sell, such Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (ii) it will solicit offers for such Notes only from,
and will offer such Notes only to, persons that it reasonably believes to be (A)
in the case of offers inside the United States, Qualified Institutional Buyers,
and (B) in the case of offers outside the United States, persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
------------------
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)) that, in each
case, in purchasing such Notes are deemed to have
14
represented and agreed as provided in the Memorandum in the section entitled
"Notice to Investors."
(b) Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees with respect to offers and sales outside the
United States that:
(i) it understands that no action has been or will be taken in
any jurisdiction by the Company that would permit a public offering of
the Notes, or possession or distribution of either the Preliminary
Memorandum or the Memorandum or any other offering or publicity
material relating to the Notes, in any country or jurisdiction where
action for that purpose is required;
(ii) such Initial Purchaser will comply with all applicable laws
and regulations in each jurisdiction in which it acquires, offers,
sells or delivers Notes or has in its possession or distributes either
the Preliminary Memorandum or the Memorandum or any such other
material, in all cases at its own expense;
(iii) the Notes have not been and will not be registered under
the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to
an exemption from the registration requirements of the Securities Act;
(iv) such Initial Purchaser has offered the Notes and will offer
and sell the Notes (A) as part of their distribution at any time and
(B) otherwise until 40 days after the later of the commencement of the
offering of the Notes and the Closing Date, only in accordance with
Rule 903 of Regulation S or another exemption from the registration
requirements of the Securities Act. Accordingly, neither such Initial
Purchaser, its Affiliates nor any persons acting on its or their
behalf has engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the Notes, and
any such Initial Purchaser, its Affiliates and any such persons has
complied and will comply with the requirements of Regulation S;
(v) such Initial Purchaser has (A) not offered or sold and will
not offer or sell any Notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Regulations; (B) complied and
will comply with all applicable provisions of the Financial Services
Xxx 0000 with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom; and (C) only
issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issuance of
the Notes to a person who is of a kind described in
15
Section 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on; and
(vi) such Initial Purchaser has not and will solicit offers for,
or offer or sell, the Notes by means of any form of general
solicitation or general advertising (as those terms are defined in
Regulation D) including, without limitation, by any form of electronic
media.
Terms used in this Section 6 have the meanings given to them by Regulation S.
7. Expenses. The Company agrees to pay all expenses incident
to the performance of its obligations under this Agreement, including: (i) the
costs incident to the authorization, issuance, sale and delivery of the Notes
and any taxes payable in that connection; (ii) the costs incident to the
preparation of the Memorandum and any amendments or supplements thereto; (iii)
the fees and disbursements of the Company's counsel and accountants and the
Trustee and its counsel; (iv) the qualification of such Notes under securities
or Blue Sky laws, including filing fees and the reasonable fees and
disbursements of counsel for the Initial Purchasers in connection therewith and
in connection with the preparation of any Blue Sky or legal investment
memoranda; (v) the printing and delivery to the Initial Purchasers in quantities
as herein above stated of copies of the Memorandum and any amendments or
supplements thereto; (vi) the fees and expenses, if any, incurred in connection
with the admission of such Notes for trading in PORTAL or any other appropriate
market system; and (vii) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section 7; provided, however, that, except as
provided in this Section 7 and Section 12, the Initial Purchasers shall pay
their own costs and expenses, including without limitation the costs and
expenses of their counsel, and any costs incident to the performance of their
obligations hereunder for which provision is not otherwise made, and any
transfer taxes on the Notes which they may sell.
8. Conditions to the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Memorandum or any amendment or supplement thereto contains any untrue
statement of a fact which, in the opinion of Shearman & Sterling,
counsel for the Initial Purchasers, is material or omits to state any
fact which, in the opinion of such counsel, is material and is
required to be stated therein
16
or is necessary to make the statements therein in light of the
circumstances in which they were made not misleading.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Registration Rights Agreement, the Indenture, the Notes, the
Memorandum and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all
respects to counsel for the Initial Purchasers, 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.
(c) Xxxxxx Xxxxxxxx LLP shall have furnished to the Initial
Purchasers its written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the
effect set forth in Exhibit A hereto and to such further effect as
counsel to the Initial Purchasers may reasonably request.
(d) Xxxxxxx & Berlin, Chartered shall have furnished to the
Initial Purchasers its written opinion, as special U.S.
telecommunications counsel to the Company, addressed to the Initial
Purchasers and dated the Closing Date, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Initial
Purchasers may reasonably request.
(e) Rakisons Solicitors shall have furnished to the Initial
Purchasers its written opinion, as British regulatory counsel to the
Company, addressed to the Initial Purchasers and dated the Closing
Date, to the effect set forth in Exhibit C hereto and to such further
effect as counsel to the Initial Purchasers may reasonably request.
(f) Xxxxxxx & Company Solicitors shall have furnished to the
Initial Purchasers its written opinion, as Australian regulatory
counsel to the Company, addressed to the Initial Purchasers and dated
the Closing Date, to the effect set forth in Exhibit D hereto and to
such further effect as counsel to the Initial Purchasers may
reasonably request.
(g) Bruckhaus Xxxxxxxx Xxxxxx Xxxxx shall have furnished to the
Initial Purchasers its written opinion, as German regulatory counsel
to the Company, addressed to the Initial Purchasers and dated the
Closing Date, to the effect set forth in Exhibit H hereto and to such
further effect as counsel to the Initial Purchasers may reasonably
request.
(h) Nagashima & Ohno shall have furnished to the Initial
Purchasers its written opinion, as Japanese regulatory counsel to the
Company, addressed to the Initial
17
Purchasers and dated the Closing Date, to the effect set forth in
Exhibit J hereto and to such further effect as counsel to the Initial
Purchasers may reasonably request.
(i) The General Counsel of TresCom shall have furnished to the
Initial Purchasers its written opinion, as counsel to TresCom,
addressed to the Initial Purchasers and dated the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchasers,
to the effect set forth in Exhibit I hereto and to such further effect
as counsel to the Initial Purchasers 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 Initial Purchasers and dated such Delivery Date, in the form
attached hereto as Exhibit E.
(k) Xxxxxxx, Xxxxxxxx & Xxxxxxxx shall have furnished to the
Representatives its written opinion, as special Canadian counsel for
the Company, addressed to the Initial Purchasers and dated such
Delivery Date, in the form attached hereto as Exhibit F.
(l) You shall have received on the date hereof and the Closing
Date a letter, dated the date hereof and the Closing 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
financial statements and certain financial information, including the
financial information contained or incorporated by reference in the
Memorandum as identified by you.
(m) You shall have received on the date hereof and the Closing
Date two letters, dated the date hereof and the Closing Date, as the
case may be, in form and substance reasonably satisfactory to you,
from Ernst & Young LLP, independent public accountants to TresCom and
USFI, 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 Memorandum as identified by you.
(n) The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of the President or a Vice
President and the Treasurer or Chief Financial Officer of the Company
stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of the Closing
Date and the Company has complied with all its agreements
contained herein;
18
(ii) (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 Memorandum, 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 Memorandum 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 Memorandum; and
(iii) They have carefully examined the Memorandum and, in
their opinion (A) the Memorandum, as of its date, 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 date of the Memorandum, no event
has occurred which was required under the Securities Act to have
been set forth in a supplement or amendment to the Memorandum.
(o) (i) 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 in the Memorandum, any loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Memorandum 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 Memorandum, the
effect of which, in any such case described in clause (i) or (ii), is, in
the judgment of the Initial Purchasers, so material and adverse as to make
it impracticable or inadvisable to proceed with the offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Memorandum.
(p) The Initial Purchasers shall have received on the Closing
Date the Registration Rights Agreement executed by the Company.
(q) The Initial Purchasers shall have received from Shearman &
Sterling, counsel to the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company
19
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.
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 Initial Purchasers.
9. Indemnification and Contribution. (a) The Company and
Primus Telecommunications, Inc., a Delaware corporation, and Primus
Telecommunications (Australia) Pty. Ltd., a company organized under the laws of
Australia (collectively, the "Principal Subsidiaries"), jointly and severally,
shall indemnify and hold harmless each Initial Purchaser, its officers and
directors and each person, if any, who controls any Initial Purchaser within the
meaning of Section 15 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 Notes), to which such Initial Purchaser,
officer, 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) the Preliminary Memorandum, the
Memorandum 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 Notes under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
--------------------
omission to state in the Preliminary Memorandum, the Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application any 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 or (iii)
any act or failure to act, or any alleged act or failure to act, by any Initial
Purchaser in connection with, or relating in any manner to, the Notes or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company and the
Principal Subsidiaries shall not be liable in the case of any matter covered by
this clause (iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such act or failure to act undertaken or
omitted to be taken by such Initial Purchaser through its gross negligence or
wilful misconduct), and shall reimburse each Initial Purchaser and each such
officer, director or controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser, officer, 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
20
statement or omission or alleged omission made in the Preliminary Memorandum,
the Memorandum 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 Initial Purchaser furnished to the Company by or on behalf of
any Initial Purchaser specifically for inclusion therein; provided further that
as to the Preliminary Memorandum, this indemnity agreement shall not inure to
the benefit of any Initial Purchaser or any officer, director or controlling
person of that Initial Purchaser on account of any loss, claim, damage,
liability or action arising from the sale of Notes to any person by such Initial
Purchaser if (i) such Initial Purchaser failed to send or give a copy of the
Memorandum, 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 Memorandum was corrected in the Memorandum or a
supplement or amendment thereto, as the case may be, unless in each case, such
failure resulted from noncompliance by the Company with Section 5(c). The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Initial Purchaser or to any officer, director or
controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its directors and officers, and each
person, if any, who controls the Company within the meaning of Section 15 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, 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) the Preliminary Memorandum, the
Memorandum or in any amendment or supplement thereto or (B) any Blue Sky
Application or (ii) the omission or alleged omission to state in the Preliminary
Memorandum, the Memorandum or in any amendment or supplement thereto, or in any
Blue Sky Application any 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, 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 Initial Purchaser furnished to the Company or the
Trustee by or on behalf of that Initial Purchaser specifically for inclusion
therein, and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, 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 Initial Purchaser
may otherwise have to the Company or any such director, officer or controlling
person.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in
21
respect thereof is to be made against the indemnifying party under this Section
9, 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 9 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 affect any liability which it may have to an
indemnified party otherwise than under this Section 9. 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 9 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, 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 9 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, 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 9(a) and 9(b), shall use its 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
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 of liability by reason of such settlement or judgment in accordance with
this Section 9.
22
(d) If the indemnification provided for in this Section 9 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(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
Initial Purchasers, on the other hand, from the offering of the Notes 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 Initial Purchasers, 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 Initial
Purchasers, 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
Notes 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 Initial Purchasers with respect to the Notes purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Notes under this Agreement, in each case as set forth in the
table on the cover page of the Memorandum. The relative fault shall be
determined by reference to, among other things, 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 Initial Purchasers, 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. Each of the
Company and the Principal Subsidiaries and the Initial Purchasers agrees that it
would not be just and equitable if contribution pursuant to this Section 9(d)
were to be determined by pro rata allocation (even if either the Initial
Purchasers 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 9(d) shall be deemed to include, subject to
limitations set forth above, 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 9(d), no Initial
Purchaser shall be required to indemnify or contribute any amount in excess of
the amount by which the proceeds received by the Initial Purchasers from an
offering of the Notes exceeds the amount of any damages which such Initial
Purchaser 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
23
remedies provided for in this Section 9 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 Initial Purchasers' obligations to contribute as
provided in this Section 9(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) Each of the Initial Purchasers confirms and the Company
acknowledges that (1) the last paragraph on the cover page, (2) the
stabilization legend on page (ii), and (3) the fifth paragraph, the sixth
paragraph, the sixth sentence of the ninth paragraph and the first sentence of
the tenth paragraph under the caption "Plan of Distribution" constitute the only
information concerning the Initial Purchasers furnished in writing to the
Company by or on behalf of the Initial Purchasers specifically for inclusion in
the Memorandum.
10. Default by Any Initial Purchaser. If, on the Closing Date,
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Notes which it or they have agreed to purchase hereunder on such date and the
aggregate principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be purchased
on such date and arrangements satisfactory to the Initial Purchasers and the
Company for the purchase of such Notes are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or of the Company. In any such case, either
you, on the one hand, or the Company, on the other hand, shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Memorandum or in any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.
11. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by them by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
(i) trading in securities generally on the New York Stock Exchange or the
American Stock 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 New York State authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in 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 Initial Purchasers, impracticable or inadvisable to proceed with
the offering or delivery of the Notes on the terms and in the manner
contemplated in the Memorandum.
24
12. Reimbursement of Initial Purchaser's Expenses. If the sale
of Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 8 hereof is not
satisfied, because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Initial Purchasers, the Company shall
reimburse the Initial Purchasers for the reasonable fees and expenses of its
counsel and for such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase of the Notes,
and upon demand the Company shall pay the full amount thereof to the Initial
Purchasers. If this Agreement is terminated pursuant to Section 10 by reason of
the default of any of the Initial Purchasers, the Company shall not be obligated
to reimburse any Initial Purchaser on account of those expenses.
13. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, 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 Memorandum, Attention: Chairman and Chief
Executive Officer (Fax: (000) 000-0000).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
14. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
officers and directors of the Initial Purchasers and the person or persons, if
any, who control the Initial Purchasers within the meaning of Section 15 of the
Securities Act and (y) the representations, warranties, indemnities and
agreements of the Initial Purchasers contained in this Agreement shall be deemed
to be for the benefit of directors and officers of the Company 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
25
in this Section 14, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Company, on the one hand, and the Initial
Purchasers, 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 Notes 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.
16. Definition of the Term "Business Day." For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
------------
Inc. is open for trading.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. 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 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. Primus Telecommunications
(Australia) 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.
19. 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
26
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.
20. 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.
21. 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.
If the foregoing correctly sets forth the agreement between the
Company, the Principal Subsidiaries and the Initial Purchasers, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
By: /s/ K. Xxxx Xxxxx
--------------------------------
Name: K. Xxxx Xxxxx
Title: President & Chief Executive
Officer
PRIMUS TELECOMMUNICATIONS,
INCORPORATED
Accepted, May 14, 1998
Xxxxxx Brothers Inc.
By: /s/ K. Xxxx Xxxxx
----------------------------------
Name: K. Xxxx Xxxxx
Title: President & Chief Executive
Officer
Acting severally on behalf
of itself and
the other initial purchasers
named in schedule i hereto. Primus Telecommunications (AUSTRALIA)
Pty. Ltd.
By: /s/ K. Xxxx Xxxxx
----------------------------------
Name: K. Xxxx Xxxxx
Title: President & Chief Executive
Officer
By: Xxxxxx Brothers Inc.
By: /s/ Xxxxxxxx X. Band
-------------------------------
AUTHORIZED REPRESENTATIVE
SCHEDULE I
--------------------------------------------------------------------------------
Principal Amount
of Notes
Initial Purchaser To Be Purchased
----------------- ---------------
--------------------------------------------------------------------------------
Xxxxxx Brothers Inc.................................. $ 90,000,000
--------------------------------------------------------------------------------
BT Alex. Xxxxx....................................... 30,000,000
--------------------------------------------------------------------------------
Xxxxxxxxx Lufkin & Xxxxxxxx Securities Corporation... 30,000,000
--------------------------------------------------------------------------------
____________
--------------------------------------------------------------------------------
Total................................................ $150,000,000
============
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT A
[LETTERHEAD OF XXXXXX XXXXXXXX LLP]
May ___, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
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 U.S. subsidiaries 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 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 Memorandum, 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 paid, non-assessable and (except for directors' qualifying shares and
except as set forth in the Memorandum) 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.
(iii) 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 the subsidiaries of the Company is the subject
A-2
which, if determined adversely to the Company or any of its subsidiaries, might
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the Company and the
subsidiaries of the Company or on the ability of the Company to perform its
obligations under the Purchase Agreement, the Indenture, the Registration Rights
Agreement or the Notes; and, to the best of our knowledge, no such proceedings
are threatened by governmental authorities or others.
(iv) To the best of our knowledge, there are no contracts or other
documents which would be required to be described in the Memorandum by the
Securities Act or by the Rules and Regulations, if the Memorandum were a
Registration Statement on Form S-1, which have not been described in the
Memorandum.
(v) To the best of our knowledge, there are no statutes or
regulations that would be required to be described in the Memorandum, if the
Memorandum, were a Registration Statement on Form S-1, that are not described as
required.
(vi) The Purchase Agreement and the TresCom Merger Agreement have
been duly authorized, executed and delivered by the Company and PTI.
(vii) The execution and delivery of the Notes have been duly
authorized by all necessary corporate action of the Company, and the Notes, when
executed and authenticated in accordance with the provisions of the Indenture
and paid for in accordance with the Purchase Agreement, will (x) constitute
valid, binding and enforceable obligations of the Company, enforceable in
accordance with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium, liquidation or similar laws affecting the rights and remedies of
creditors and other obligees generally and except as may be subject to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (y) be entitled to the benefits of the
Indenture.
(viii) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and PTI and constitutes a valid and
binding agreement of the Company and PTI, enforceable against the Company and
PTI in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
liquidation, moratorium or other similar laws affecting the rights and remedies
of creditors and other obligees generally and except as may be subject to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and except as rights to indemnity and
contribution thereunder may be limited by applicable law and public policy.
(ix) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery thereof
by the Trustee,
A-3
constitutes a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium, liquidation or other similar laws affecting the rights and
remedies of creditors and other obligees generally or by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(x) The issue and sale of the Notes being delivered on the Closing
Date by the Company, the compliance by the Company with all of the provisions of
the Purchase Agreement, the Registration Rights Agreement and the Indenture and
the consummation of the transactions contemplated hereby and thereby, will not
result in a material 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 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 subsidiaries of the Company or (B) to the best of
our knowledge, any statute or any order, rule or regulation known to us 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 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 Notes by the Initial Purchasers, 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 Indenture by the Company and the consummation by the Company
of the transactions contemplated hereby.
(xi) The statements contained in the Memorandum under the captions
"Certain Transactions," "Management - Employment Agreements," "Management -
Stock Plans" and "Certain 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 the
information disclosed therein in all material respects.
(xii) The statements contained in the Memorandum under the caption
"Description of Notes," insofar as they purport to describe certain of the terms
of the documents referred to therein, fairly summarize such terms of such
documents in all material respects.
A-4
(xiii) Based upon the representations, warranties, and agreements of
the Company in Sections 1(v), 1(w), 5(h), 5(i), 5(j) and 5(l) of the Purchase
Agreement and of the Initial Purchasers in Sections 3 and 6 of the Purchase
Agreement, it is not necessary in connection with the offer, sale and delivery
of the Notes to the Initial Purchasers under the Purchase Agreement, or in
connection with the initial resale of such Notes by the Initial Purchasers in
accordance with Section 6 of the Purchase Agreement, to register the Notes under
the Securities Act of 1933, it being understood that no opinion is expressed as
to any subsequent resale of any security.
EXHIBIT B
[LETTERHEAD OF XXXXXXX & BERLIN, CHARTERED]
May__, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
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 Purchase Agreement by the
Company and the issue and sale of the Notes contemplated thereby do not violate
(1) the Communications Act, (2) any rules or regulations of the FCC applicable
to the Company and/or to PTI, (3) any State Telecommunications Laws applicable
to the Company and/or to PTI, 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 Purchase
Agreement by the Company and the issue and sale of the Notes contemplated
thereby in accordance with the terms thereof;
(ii) PTI 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) (1996) without any further order, license, permit or other
authorization by the FCC. PTI 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) PTI is certified, registered or otherwise authorized, or is not
required to obtain authority to resell intrastate interexchange
telecommunications services in all U.S. states except Hawaii and Alaska. PTI
has a tariff on file in each of the states in which a tariff is required to be
filed;
(iv) (A) PTI (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
B-2
material adverse effect on the financial condition, the earnings, business or
operations of PTI; and (2) based on our understanding of PTI's 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 Memorandum 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; and (B) to the best of our knowledge, PTI 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
financial condition, the earnings, business or operations of the Company and its
subsidiaries taken as a whole;
(v) Based on our understanding of PTI's operations from the
Certificate, neither the Company nor PTI 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 (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 Memorandum under the captions "Risk
Factors -Potential Adverse Effects of Regulation - United States" 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.
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 Closing Date; (2) any action that
would transfer de facto or de jure legal control of PTI 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
B-3
with respect to such matters; and (4) all opinions expressed in this letter are
limited solely to the effect of the Communications Act and State
Telecommunications Laws on the telecommunications business of the Company and
PTI and we express no opinion as to the effect of any other federal or state
statute or equitable doctrine or common law or of the regulations of any other
agency or administrative body.
Other than as expressly stated in paragraphs one (i) through seven
(vii), no opinion is rendered as to the compliance of PTI 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 or PTI or otherwise imposed by statute, rule, regulation or
policy, and we assume no obligation to ensure that the Company or PTI comply
with such conditions or requirements. We are admitted to the District of
Columbia Bar and, with respect to any matters concerning the law of the States,
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
telecommunications laws of the States, are not admitted to the Bars of the
States and are not experts in the laws of those jurisdictions.
EXHIBIT C
[LETTERHEAD OF RAKISONS SOLICITORS]
May ___, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: PRIMUS TELECOMMUNICATIONS, INC. ("PRIMUS") - OPINION LETTER
----------------------------------------------------------------
(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 [ ] 1998
issued under Section 7 of the Telecommunications 1984 Act ("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
[ ] 1998 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 Memorandum 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 Memorandum;
(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;
C-2
(d) 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;
(e) 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
(f) insofar as the statements in the Final Memorandum relate to the United
Kingdom, namely those under the captions "Risk Factors - Potential
Adverse Effects of Regulation"; "Business - Network" and "Business -
Government Regulation," and insofar as they constitute summaries of
matters, documents or proceedings which are the subject of the laws of
England and Wales, they are accurate in all material respects and
fairly summarize such matters, documents or proceedings.
EXHIBIT D
[LETTERHEAD OF XXXXXXX & COMPANY]
May__, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
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.
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 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.
D-2
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, owning 1,725,000 ordinary
shares (or 60%) out of a total of 2,875,000 issued ordinary shares.
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
5.1 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 Purchase Agreement has been duly authorized, executed and delivered by
Primus Aust.
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 Offering
Memorandum;
(b) has not received any notice of proceedings relating to revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals;
(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
D-3
Primus and its subsidiaries, taken as a whole, except as described
in the Offering Memorandum.
7. REGULATORY ENVIRONMENT
The statements in the Offering Memorandum under the captions:
* "Risk Factors - 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 Offering Memorandum 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 proceeding 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, XXXXXX & HARCOURT]
May __, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
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 Offering Memorandum under the captions "Risk
Factors -- Potential Adverse Effects of Regulation -- Canada," 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.
EXHIBIT F
[LETTERHEAD OF XXXXXXX, XXXXXXXX & XXXXXXXX]
May__, 1998
Xxxxxx Brothers Inc.
as Representative of the Initial Purchasers
named in Schedule 1 to the Purchase Agreement
referred to below
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
We have acted as special Canadian counsel to Primus Telecommunications
Group, Incorporated, a Delaware corporation ("Primus"), in connection with the
execution and delivery by Primus of the Purchase Agreement dated May __, 1998
(the "Purchase Agreement") by and among Primus and you, as representative (the
"Representative") of the other Initial Purchaser listed on Schedule I attached
thereto (the "Initial Purchasers"), relating to $___,000,000 aggregate principal
amount of the Company's __% Senior Notes due 20__ (the "Notes"). This opinion
is delivered to you pursuant to Section 8(f) of the Purchase Agreement.
Capitalized terms used herein but not otherwise defined have the meanings
ascribed to them in the Purchase Agreement.
In connection with this opinion, we have examined the Purchase
Agreement and originals, or copies reproduced or certified to our satisfaction,
of such corporate records of Primus and 336 2426 Canada Inc., doing business as
Primus Telecommunications Canada ("Primus Canada") as we have deemed necessary
to form the basis for the opinions hereinafter expressed. We have also made
such examination of laws, of certificates of public officials, and of Primus and
Primus Canada, as we have deemed necessary to enable us to render this opinion.
As to matters of fact relevant to the opinions herein expressed, we have assumed
the accuracy and completeness of, and have relied solely upon, the
representations and warranties of Primus contained in the Purchase Agreement and
in such certificates of officers of Primus and Primus Canada, and of
certificates of public officials.
We have assumed (i) the due execution and delivery, pursuant to due
authorization, of the Purchase Agreement by the parties thereto other than
Primus, (ii) the genuineness of the signatures of, and the authority of, persons
signing the Purchase Agreement on behalf of all parties other than Primus, (iii)
the genuineness of all signatures and the authenticity and completeness of all
records, certificates, instruments and documents submitted to us as originals,
and (iv) the conformity to authentic originals of all records, certificates,
instruments and documents submitted to us as certified, conformed, photostatic
or facsimile copies thereof.
This opinion is limited solely to matters governed by the laws of
Canada.
Based upon the foregoing assumptions, and subject to the
qualifications set forth below, we are of the opinion that:
Primus Canada has been duly incorporated and is validly existing as a
corporation in good standing under the laws of [ ___________ ], is duly
qualified to do business and is in good standing in each jurisdiction in
which its ownership or lease of property or the conduct of its respective
businesses require such qualification (except where the failure to so
qualify, singly or in the aggregate, would not have a material adverse
effect on the financial position, stockholders' equity, results of
operations or business of Cam-Net), and has all power and authority
necessary to own or hold its respective properties and conduct the
businesses in which they are engaged.
Very truly yours,
Xxxxxxx, Xxxxxxxx & Xxxxxxxx
EXHIBIT G
REGISTRATION RIGHTS AGREEMENT
EXHIBIT H
[LETTERHEAD OF BRUCKHAUS XXXXXXXX XXXXXX XXXXX]
We are of the opinion that:
(1) the descriptions in the Preliminary Offering Memorandum given under the
captions "Risk Factors - Potential Adverse Effects of the Regulation -Germany"
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; we advise you, however, that the German Regulator's interpretation of
the German Telecom Act as well as its complementing ordinances may be subject to
material changes which can presently not be predicted in content or scope. More
specifically, the German Regulator has already indicated repeatedly that it may
want to start differentiating between facilities-based telecom operators and
switch-based resellers with regard to the applicable interconnection rates
(possibly reserving the provisionally approved interconnection rates of
September 1997 to facilities-based operators) and with regard to the catchment
areas for origination services (possibly restricting these to local area codes
around the points of interconnection). This regulatory change may become
effective only for the future but may also apply ex nunc or even retroactively
and may potentially require Primus to invest more heavily into network structure
and/or pay higher interconnection prices. Also, several issues have been brought
before the competent courts or may be pending due to ongoing regulatory
proceedings launched by third parties. This applies, in particular, to the
German Regulator's regulation of interconnection rates of September 1997 for the
years 1998-99 which is under court review and which may result in higher prices
being found to be applicable by the courts. According to the current
interconnection agreement with Deutsche Telekom these would apply retroactively
to all telecommunication services provided to Primus Germany by Deutsche Telekom
AG since the inception of services thereunder; its is, however, unclear whether
this retroactive effect stipulated in the interconnection agreement would
sustain court scrutiny.
(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 Purchase
Agreement by the Company and the consummation of the transactions (including,
without limitation, issuance of the Notes and execution of the Indenture and the
H-2
Registration Rights--Agreement) contemplated thereby in accordance with the
terms thereof; we advise you, however, that, should the Purchase Agreement or
other agreements connected therewith allow for conversion of the senior notes
into shares of the Company and should such conversion lead to a change of
control, then such change of control would have to be filed with the German
Regulator and, as the case may be, with the Federal Cartel Office.
(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
Preliminary Offering Memorandum; and (B) to our knowledge 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, condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a whole; we
advise you, however, that (i) the German Regulator may change requirements for a
license class 4 and Primus Germany may, therefore, in the future be required to
extend its current license and may have to pay additional license fees; (ii)
Primus Germany's use of the business name "Primus" itself as well as its use of
the name in its business dealings with third parties or for describing its
services products is challenged in a pending name and trademark dispute raised
by Metro Vermogensverwaltung GmbH & Co. KG and its wholly-owned subsidiary
Primus Digital TV GmbH on March 26, 1998, based on the identical name element
"Primus" (in the case of Primus Digital TV GmbH) as well as on two separate
trademarks "Primus" registered for neighboring business sectors (in the case of
Metro Vermogensverwaltung GmbH & Co. KG) and for business fields including
telecommunication services (in the case of Primus Digital TV GmbH). As a
consequence of this trademark dispute Primus may be forced to relinquish the
element "Primus" as part of its German company name and in its business dealings
with third parties.
(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, 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
_____________________ we advise you, however, that Deutsche Telekom AG has
reserved itself in the interconnection agreement with Primus Germany the
unilateral right to apply to the German Regulator with regard to the questions
(i) whether Primus Germany's network structure, in particular the number and
locations of points of
H-3
interconnection with Deutsche Telekom AG, entitles Primus Germany to
interconnection as defined by Section 35 German Telecom Act and (ii) whether it
entitles Primus Germany to the switching of calls originating Germany-wide; the
result of such regulatory proceeding if launched until May 31, 1998 xxxx be a
contractually founded claim by Deutsche Telekom AG to amend the interconnection
agreement in accordance with the German Regulator's ruling and, thus could
potentially require additional investments into points of
interconnection/switching facilities and/or the payment of higher
interconnection prices and/or a geographical restriction of Primus Germany's
switching of originating calls.
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 of modify the
opinion expressed herein;
EXHIBIT I
[LETTERHEAD OF NAGASHAMA & OHNO]
1. the descriptions in the Offering Memorandum 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-Potential Adverse Effects of 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 ________ __, 199__ 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 Purchase Agreement by the Company,
and the consummation of the transactions (including, without limitation,
issuance of the Notes and execution of the Indenture and the Registration
Rights Agreement) 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
Purchase Agreement by the Company and the consummation of the transactions
(including, without limitation, issuance of the Notes and execution of the
Indenture and the Registration Rights Agreement) 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 Offering
Memorandum; 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
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.
I-2
on the prospects, condition, financial or otherwise, or in the earnings,
business or operations of the Japanese Subsidiaries, taken as a whole; and
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.
