Exhibit 10.15
SECURITIES PURCHASE AGREEMENT
AMONG
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED,
QUANTUM INDUSTRIAL PARTNERS LDC,
S-C PHOENIX HOLDINGS, L.L.C.,
WINSTON PARTNERS II LLC
AND
WINSTON PARTNERS II LDC
Dated as of July 31, 1996
TABLE OF CONTENTS
1. Sale and Purchase of Securities........................................... 1
1.1 Sale and Purchase of Securities....................................... 1
2. Purchase Price............................................................ 1
2.1 Amount of Purchase Price.............................................. 1
2.2 Payment of the Purchase Price......................................... 1
3. Closing; Termination of Agreement......................................... 2
3.1 Closing Date.......................................................... 2
4. Representations and Warranties of the Company............................. 2
4.1 Organization and Good Standing........................................ 2
4.2 Authorization of Agreement; Enforceablility........................... 2
4.3 Subsidiaries.......................................................... 2
4.4 Consents of Third Parties............................................. 3
4.5 Capitalization........................................................ 3
4.6 Financial Statements.................................................. 4
4.7 No Undisclosed Liabilities............................................ 4
4.8 Absence of Certain Developments....................................... 4
4.9 Taxes................................................................. 6
4.10 Real Property........................................................ 7
4.11 Tangible Personal Property........................................... 8
4.12 Intangible Property.................................................. 8
4.13 Material Contracts................................................... 10
4.14 Employee Benefits.................................................... 11
4.15 Employees............................................................ 12
4.16 Litigation........................................................... 13
4.17 Compliance with Laws; Permits........................................ 13
4.18 Environmental Matters................................................ 13
4.19 Investment Company Act............................................... 14
4.20 Transactions with Affiliates......................................... 14
4.21 Teleglobe............................................................ 14
4.22 No Misrepresentation................................................. 14
4.23 Financial Advisors................................................... 15
5. Representations and Warranties of the Purchasers.......................... 15
5.1 Organization and Good Standing........................................ 15
5.2 Authorization of Agreement............................................ 15
5.3 Purchaser Representation.............................................. 15
5.4 Investment Intention.................................................. 15
5.5 Financial Advisors.................................................... 16
6. Further Agreements of the Parties......................................... 16
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6.1 Access to Information.................................... 16
6.2 Covenants................................................ 16
6.3 Use of Proceeds.......................................... 17
6.4 Financial Statements, Other Information and Annual
Budget.................................................. 17
6.5 Confidentiality.......................................... 17
6.6 Other Actions............................................ 18
6.7 Updating of Information.................................. 18
6.8 Share Adjustment......................................... 18
6.9 Foreign Ownership........................................ 18
6.10Indemnity................................................ 18
7. Documents to be Delivered at the Closing..................... 20
7.1 Documents to be Delivered by the Company................. 20
7.2 Delivery of Purchase Price............................... 21
7.3 Pre-Closing Deliveries................................... 21
8. Miscellaneous................................................ 21
8.1 Survival of Representations and Warranties............... 21
8.2 Certain Definitions...................................... 21
8.3 Expenses................................................. 25
8.4 Specific Performance..................................... 25
8.5 Further Assurances....................................... 26
8.6 Submission to Jurisdiction; Consent to Service of
Process................................................. 26
8.7 Entire Agreement; Amendments and Waivers................. 26
8.8 Governing Law............................................ 26
8.9 Table of Contents; Headings; Interpretive Matters........ 27
8.10 Notices................................................. 27
8.11 Severability............................................ 27
8.12 Binding Effect; Assignment.............................. 28
8.13 Counterparts............................................ 28
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EXHIBITS
I Form of Purchase Warrant
II Form of Contingent Warrant
SCHEDULES
1 Schedule of Payments and Securities
4.3 Subsidiaries
4.5 Capitalization
4.6 Financial Information
4.7 Liabilities
4.8 Absence of Certain Developments
4.9 Taxes
4.10(B) Real Property Leases
4.11 Tangible Personal Property
4.12 Intangible Property
4.13 Material Contracts
4.14 Employee Benefit Plans
4.15 Employee Matters
4.16 Litigation
4.17 Permits
4.20 Transactions with Affiliates
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated as of July 31, 1996 (the
"Agreement"), among Primus Telecommunication Group, Incorporated, a Delaware
corporation (the "Company"), and Quantum Industrial Partners LDC, a Cayman
Islands limited duration company, S-C Phoenix Holdings, L.L.C., a Delaware
limited liability company, Winston Partners II LDC, a Cayman Islands limited
duration company, and Winston Partners II LLC, a Delaware limited liability
company (each a "Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to issue to each Purchaser, and each
Purchaser desires to purchase from the Company, (a) the number of shares of
Common Stock of the Company, par value $.01 per share (the "Common Stock")
listed next to such Purchaser on Schedule I attached hereto (collectively, the
"Shares"); and (b) a warrant convertible into shares of Common Stock,
substantially in the form attached as Exhibit I hereto (each, a "Purchase
Warrant" and collectively, the "Purchase Warrants" and together with the Shares,
the "Securities") for the Purchase Price and upon the terms and conditions
hereinafter set forth; and
WHEREAS, certain terms used in this Agreement are defined in
Section 8.2;
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter contained, the parties hereto hereby agree as
follows:
1. Sale and Purchase of Securities.
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1.1 Sale and Purchase of Securities. Subject to the terms and
-------------------------------
conditions of this Agreement, on the Closing Date (as defined in Section 3.1
hereof) the Company shall sell, assign, transfer, convey and deliver to each
Purchaser, and each Purchaser shall purchase from the Company, (a) the Shares
being purchased by such Purchaser and (b) a Purchase Warrant, all as indicated
on Schedule 1.
2. Purchase Price.
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2.1 Amount of Purchase Price. The purchase price for the Securities
------------------------
shall be as indicated on Schedule I (the "Purchase Price"). The Purchase Price
shall be payable as provided in Section 2.2 hereof.
2.2 Payment of the Purchase Price. At the Closing, each Purchaser
-----------------------------
shall pay the Purchase Price by wire transfer of clearinghouse funds or by such
other method as may be reasonably acceptable to the Company and such Purchaser
to such account of the Company as shall have been designated in advance to such
Purchaser by the Company.
3. Closing; Termination of Agreement.
---------------------------------
3.1 Closing Date. The closing of the sale and purchase of the
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Securities provided for in Section 1.1 (the "Closing") shall take place at
9:00 a.m. at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. in New
York, New York (or at such other place as the parties may mutually agree) on the
date hereof, or on such other date as the parties hereto may mutually agree. The
date on which the Closing is held is referred to in this Agreement as the
"Closing Date." At the Closing, the parties shall execute and deliver the
documents referred to in Section 7 hereof.
4. Representations and Warranties of the Company. For purposes of
---------------------------------------------
this Section 4, unless otherwise indicated, the term "Company Group" shall mean
the Company and each of its Subsidiaries and references to the Company Group
shall mean each member of the Company Group. The Company hereby represents and
warrants to each Purchaser that:
4.1 Organization and Good Standing. The Company is duly organized,
------------------------------
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to own, lease and operate its
properties and assets and to carry on its respective business as now conducted
and as it is proposed to be conducted. The Company is duly qualified or
authorized to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the conduct of its business or the
ownership of its properties or assets requires such qualification or
authorization, except for those jurisdictions where the failure to be so
qualified would not have or result in a material adverse effect in the business,
properties, results of operations, prospects or conditions (financial or
otherwise) of the Company.
4.2 Authorization of Agreement; Enforceability. The Company has all
------------------------------------------
requisite corporate power and authority to execute and deliver this Agreement
and each other agreement, document, instrument or certificate contemplated by
this Agreement or to be executed by the Company in connection with the
consummation of the transactions contemplated by this Agreement (the
"Transaction Documents") and to perform fully its obligations hereunder and
thereunder. The execution, delivery and performance by the Company of this
Agreement and the Transaction Documents have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement and each
of the Transaction Documents have been duly and validly executed and delivered
by the Company and (assuming the due authorization, execution and delivery
thereof by each Purchaser) this Agreement and each of the Transaction Documents
constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.3 Subsidiaries. (a) Except as set forth on Schedule 4.3, the Company
------------
has no Subsidiaries.
(b) Each Subsidiary is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation and has full
corporate power and authority to own, lease and operate its respective
properties and assets and to carry on its respective businesses as now
conducted and as it is proposed to be conducted. Each Subsidiary is duly
qualified or authorized to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the conduct of its
business or the ownership of its properties or assets requires such
qualification or authorization, except for those jurisdictions where the failure
to be so qualified would not have or result in a material adverse effect in the
business, properties, results of operations, prospects or conditions (financial
or otherwise) of such Subsidiary.
(c) The authorized capital stock of each Subsidiary is as set
forth on Schedule 4.3. Except as disclosed on Schedule 4.3, there is no existing
option, warrant, call, right, commitment or other agreement of any character to
which the Company or any Subsidiary is a party requiring, and there are no
securities of the Company or any Subsidiary outstanding which upon conversion or
exchange would require, the issuance, sale or transfer of any additional shares
of capital stock or other equity securities of any Subsidiary or other
securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other equity securities of
any Subsidiary. Except as disclosed on Schedule 4.3, neither the Company nor any
Subsidiary is a party to any voting trust or other voting agreement with respect
to any of the securities of any Subsidiary or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the capital stock
or any subsidiary.
4.4 Consents of Third Parties. None of the execution and
-------------------------
delivery by the Company of this Agreement and the Transaction Documents, the
consummation of the transactions contemplated hereby or thereby, or compliance
by the Company with any of the provisions hereof or thereof will (a) conflict
with, or result in the breach of, any provision of the certificate of
incorporation or by-laws of the Company or any Subsidiary; (b) conflict with,
violate, result in the breach or termination of, or constitute a default or give
rise to any right of termination or acceleration or right to increase the
obligations or otherwise modify the terms thereof under any Contract, Permit or
Order to which the Company Group is a party or by which the Company Group or any
of its properties or assets is bound; (c) constitute a violation of any Law
applicable to the Company Group; or (d) result in the creation of any Lien upon
the properties or assets of the Company Group. Other than those which have been
obtained or made, no consent, waiver, approval, Order, Permit or authorization
of, or declaration or filing with, or notification to, any Person or
Governmental Body is required on the part of the Company Group in connection
with the execution and delivery of this Agreement or the Transaction Documents,
or the compliance by the Company with any of the provisions hereof or thereof.
4.5 Capitalization. The authorized capital stock of the
--------------
Company is as set forth on Schedule 4.5. The Shares are, and the Common Stock
when issued and delivered by the Company upon conversion of the Purchase
Warrants or pursuant to Section 6.10, will be, duly authorized for issuance and
validly issued, fully paid and non-assessable. Except as disclosed on Schedule
4.5, there is no existing option, warrant, call, right, commitment or other
agreement of any character to which the Company is a party requiring, and there
are no securities of the Company outstanding which upon conversion or exchange
would require, the
issuance, sale or transfer of any additional shares of capital stock or other
equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company. Except as disclosed on
Schedule 4.5, the Company is not a party to, nor is aware of, any voting trust
or other voting agreement with respect to any of the securities of the Company
or to any agreement relating to the issuance, sale, redemption, transfer or
other disposition of the capital stock of the Company.
4.6 Financial Statements. Attached as Schedule 4.6 hereto are (i) copies
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of the unaudited consolidated balance sheets of the Company as of June 30, 1996
and the related unaudited consolidated statements of income and cash flows for
the quarter then ended (the "Latest Statements") and (ii) the audited
consolidated balance sheets of the Company as of December 31, 1995 and the
related consolidated statements of income and cash flows for such year ended
(such statements, including the related notes and schedules thereto, and the
Latest Statements, are referred to herein as the "Financial Statements"). Each
of the Financial Statements was prepared in good faith by the Company, is
complete and correct in all material respects taken as a whole, has been
prepared in accordance with GAAP and in conformity with the practices
consistently applied by the Company and presents fairly the consolidated
financial position, results of operations and cash flows of the Company as of
the dates and for the periods indicated. To the knowledge of the Company, there
has not occurred any breach of any covenant, representation or warranty made in
favor of, or owed to, the Company Group under the Axicorp Agreement, nor, to its
knowledge, does there exist any facts or circumstances which are likely to give
rise to such breach.
4.7 No Undisclosed Liabilities. Except as set forth on Schedule 4.7,
--------------------------
the Company has no liabilities (whether accrued, absolute, contingent or
otherwise, and whether due or become due or asserted or unasserted), except (a)
obligations under Contracts described in Schedule 4.13 or under Contracts that
are not required to be disclosed thereon as a result of dollar thresholds
therein, (b) liabilities provided for in the Latest Statements, (c) liabilities
incurred since the Latest Statements, in the ordinary course of business
consistent with past practice or (d) other liabilities the sum of which is, in
the aggregate, no greater than $500,000. Unless specifically disclosed as a
breach on Schedule 4.7, disclosure of a Contract on Schedule 4.13 shall not be
disclosure of liability for a breach of any provision of such Contract.
4.8 Absence of Certain Developments. Except as expressly contemplated by
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this Agreement, or as set forth on Schedule 4.8, since December 31, 1995:
(a) there has not been any Material Adverse Change nor has any event
occurred which could result in any Material Adverse Change;
(b) there has not been any damage, destruction or loss, whether or not
covered by insurance, with respect to the property and assets of the Company
Group having a replacement cost of more than $50,000 for any single loss or
$200,000 for all such losses;
(c) there has not been any declaration, setting a record date, setting
aside or authorizing the payment of, any dividend or other distribution in
respect of any shares of capital
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stock of the Company or any repurchase, redemption or other acquisition by the
Company, of any of the outstanding shares of capital stock or other securities
of, or other ownership interest in, the Company, including as relates to the
transactions contemplated by the Teleglobe Agreement;
(d) there has not been any transfer, issue, sale or other
disposition by the Company Group of any shares of capital stock or other
securities of the Company Group or any grant of options, warrants, calls or
other rights to purchase or otherwise acquire shares of such capital stock or
such other securities;
(e) the Company Group has neither awarded or paid any bonuses
to employees of the Company Group nor entered into any employment, deferred
compensation, severance or similar agreements (nor amended any such agreement)
or agreed to increase the compensation payable or to become payable by it to any
of the Company Group's directors, officers, employees, agents or Representatives
or agreed to increase the coverage or benefits available under any severance
pay, termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with such directors, officers, employees, agents or
Representatives, other than in the ordinary course of business consistent with
past practice which increases in the aggregate do not exceed $200,000 in annual
cost to the Company Group, and other than as may have been required by Law or
insurers;
(f) the Company Group has not failed to pay and discharge
current liabilities when due except where disputed in good faith by appropriate
proceedings;
(g) the Company Group has not made any loans, advances or
capital contributions to, or investments in, any Person or paid any fees or
expenses to any Affiliate of the Company Group;
(h) the Company Group has not mortgaged, pledged or
subjected to any Lien any of its assets, or acquired any assets or sold,
assigned, transferred, conveyed, leased or otherwise disposed of any assets of
the Company Group except for assets acquired or sold, assigned, transferred,
conveyed, leased or otherwise disposed of in the ordinary course of business
consistent with past practice;
(i) the Company Group has not discharged or satisfied any
Lien, or paid any obligation or liability (fixed or contingent), except in the
ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Company Group taken as a whole
(j) the Company Group has not canceled or compromised any
debt or claim or amended, canceled, terminated, relinquished, waived or
released any Contract or right except in the ordinary course of business
consistent with past practice and which, in the aggregate, would not be material
to the Company Group taken as a whole;
5
(k) the Company Group has not transferred or granted any rights under
any contracts, leases, licenses, agreements or Proprietary Rights (as defined
in Section 4.12 hereof) used by the Company Group in its business which could
result in a Material Adverse Change; and
(l) the Company Group has not made any binding committment to make any
capital expenditures or capital additions or betterments in excess of $4.6
million individually or $10 million in the aggregate (the material items
comprising these amounts being set forth on Schedule 4.8).
4.9 Taxes.
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(a) The Company Group or the Company Group's affiliated, combined or
unitary group, as the case may be (collectively, the "Tax Affiliates"), have
timely filed with the appropriate Governmental Bodies all Tax Returns required
to be filed by or with respect to them, their operations and assets, and as of
the time of filing, all such Tax Returns were true, complete and correct.
(b) Each of the Company Group and the Tax Affiliates has (a) timely
paid all Taxes that are due and payable with respect to taxable periods ended on
or before the Closing Date with respect to the Company, its operations and
assets, except for Taxes that are being contested in good faith by appropriate
proceedings and as to which reasonable reserves have been established; and (b)
established adequate reserves (excluding reserves for deferred Taxes) for the
payment of all Taxes not yet due and payable with respect to the results of
operations through the Closing Date. Further, there are no Tax Liens upon any
property or assets of the Company Group or any of the Tax Affiliates except
liens for current Taxes not yet due.
(c) The Company Group (or a Tax Affiliate thereof) has complied with
all applicable Laws relating to the payment and withholding of Taxes and have
timely withheld from employee wages and paid over to the proper Governmental
Bodies all amounts required to be so withheld and paid over for all periods
under all applicable Laws.
(d) None of the periods covered by the Tax Returns of the Company Group
(or its Tax Affiliates) has been closed by an applicable statute of limitation.
(e) Neither the Company Group nor any of the Tax Affiliates has
executed or filed with the IRS or any other taxing authority any agreement or
other document extending or having the effect of extending the period for
assessment or collection of any Taxes for which the Company Group or any Tax
Affiliate would be liable.
(f) Neither the Company Group nor any of the Tax Affiliates on behalf
of the Company Group has executed or entered into any closing agreement pursuant
to Section 7121 or the Code, or any predecessor provision thereof or any similar
provision of state, local or foreign Law.
6
(g) No federal, state, local or foreign Tax audits or other
administrative action or proceedings or court proceedings for the assessment or
collection of Taxes have been conducted or are presently pending, nor has any
such action or proceeding been asserted or, to the Company's best knowledge,
threatened against the Company Group or its Tax Affiliates or any of their
assets.
(h) The Company Group is not (nor has it ever been) a party to,
bound by or subject to any obligation under any tax sharing or similar
agreement. Except as provided on Schedule 4.9, neither the Company Group nor
any of the Tax Affiliates has any liability for the Taxes of any Person under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local,
or foreign law), as a transferee or successor, by contract or otherwise.
(i) Neither the Company Group nor any of the Tax Affiliates on
behalf of the Company Group has (a) agreed to or is required to make any
adjustment pursuant to Section 481(a) of the Code by reason of a change in
accounting method initiated by the Company Group, (b) knowledge that any proper
Governmental Body has proposed any such adjustment or change in accounting
method or (c) an application pending with any such Governmental Body requesting
permission for any change in accounting methods that relates to the business and
operations of the Company Group.
(j) The Company Group is not a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code.
(k) There is no contract, agreement, plan or arrangement covering
any person that, individually or collectively, could give rise to the payment of
any amount that would not be deductible by the Purchaser or the Company Group by
reason of Section 280G of the Code.
4.10 Real Property.
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(a) The Company Group does not own any real property.
(b) Schedule 4.10B sets forth a complete list of all real property
and interests in real property leased by the Company Group (each a "Real
Property Lease", and collectively, the Real Property Leases) as lessee or
lessor. The Company Group has good and marketable title to the leasehold
estates in all Real Property Leases in each case free and clear of all Liens.
The Company has no reason to believe that such title would not be insurable
subject to customary exceptions.
(c) Each of the Real Property Leases is valid and enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or
in equity), and there is no default under any Real Property Lease either by the
Company Group or, to the best knowledge of the Company, by any other party
thereto, and no event has occurred that with the lapse of time or the giving of
notice or both would constitute a default thereunder. The Company Group has
delivered or otherwise made available to each Purchaser
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true, correct and complete copies of the Real Property Leases, together with all
amendments, modifications, supplements or side letters affecting the obligations
of any party thereunder.
(d) No previous or current party to any Real Property Lease has
given notice or made a claim with respect to any breach or default thereunder.
With respect to those Real Property Leases that were assigned or subleased to
the Company Group by a third party, all necessary consents to such assignments
or subleases have been obtained.
4.11 Tangible Personal Property.
--------------------------
(a) Schedule 4.11 sets forth all leases of personal property
("Personal Property Leases") involving annual payments in excess of $25,000
relating to personal property used in the business of the Company Group or to
which the Company Group is a party or by which the Company Group or any of their
respective properties or assets is bound. The Company has delivered or
otherwise made available to each Purchaser true, correct and complete copies
of the Personal Property Leases, together with all amendments, modifications,
supplements or side letters affecting the obligations of any party thereunder.
(b) (i) Each of the Personal Property Leases is in full force and
effect and is valid, binding and enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and there is no
default under any Personal Property Lease either by the Company Group or, to the
best knowledge of the Company, by any other party thereto, and no event has
occurred that with the lapse of time or the giving of notice or both would
constitute a default thereunder.
(ii) No previous or current party to any such Personal Property
Lease has given notice or made a claim to the Company Group, with respect to any
breach or default thereunder.
(c) With respect to those Personal Property Leases that were
assigned or subleased to the Company Group by a third party, all necessary
consents to such assignments or subleases have been obtained.
(d) The Company Group has good and marketable title to all of the
material items of tangible personal property used by it (except as sold or
disposed of subsequent to the date thereof in the ordinary course of business
consistent with past practice), free and clear of any and all Liens. All such
items of tangible personal property which, individually or in the aggregate, are
material to the operation of the business of the Company Group are in reasonably
good condition and in a state of good maintenance and repair (ordinary wear and
tear excepted) and are suitable for the purposes used for the operation of the
business of the Company Group.
4.12 Intangible Property.
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(a) "Proprietary Rights" shall mean any and all of the following
------------------
which have been or are used and/or owned by, and/or issued or licensed to, the
Company Group, along with all income, royalties, damages and payments due or
payable at the Closing or thereafter, including, without limitation, damages and
payments for past, present or future infringements or misappropriations thereof,
the right to xxx and recover for past infringements or misappropriations thereof
and any and all corresponding rights that, now or hereafter, may be secured
throughout the world: patents, patent applications, patent disclosures and
inventions (whether or not patentable and whether or not reduced to practice)
and any reissue, continuation, continuation-in-part, division, revision,
extension or reexamination thereof; utility model registrations and
applications; design registrations and applications; trademarks, service marks,
trade dress, logos, trade names and corporate names together with all goodwill
associated therewith, copyrights registered or unregistered and copyrightable
works; mask works; and all registrations, applications, and renewals for any of
the foregoing; trade secrets and confidential information (including without
limitation, ideas, formulae, compositions, know-how, manufacturing and
production processes and techniques, research and developmental information,
drawings, specifications, designs, plans, proposals, technical data, financial,
business and marketing plans, and customer and supplier lists and related
information); computer software and software systems (including, without
limitation, data, databases and related documentation); other proprietary and
intellectual property rights; licenses or other agreements including but not
limited to those assigning, waiving or relating to rights of publicity, moral
rights or neighboring rights to or from third parties; and all copies and
tangible embodiments of the foregoing (in whatever form or medium), in each case
including, without limitation, the items set forth on the Schedule 4.12 attached
hereto.
(b) Schedule 4.12 sets forth a complete and correct list of: (i)
all patents trademark and servicemark registrations, copyright registrations
and other registered Proprietary Rights as well as all pending applications
therefor, (ii) all corporate names, trade names and unregistered trademarks used
by the Company Group (to the extent not reflected on other Schedules attached
hereto) as their own marks, (iii) all material unregistered copyrightable works
authored by the Company, mask works, and material computer software owned or
licensed by the Company Group (other than commercial software products generally
available to consumers), and (iv) all material licenses or similar agreements to
which the Company Group is or just prior to closing was a party either as
licensee or licensor for the Proprietary Rights, in each case identifying the
subject Proprietary Rights.
(c) Except as set forth on Schedule 4.12, (i) the Company Group owns
and possesses all right, title and interest, free and clear of all Liens, in and
to, and to the Company's knowledge has a valid and enforceable right to, each of
the Proprietary Rights, and no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Proprietary Rights has been made,
is currently outstanding or, to the Company's knowledge, is threatened, (ii) the
Proprietary Rights comprise all material intellectual property rights which are
currently being used by the Company Group or which are necessary for the
operation of Company Group's businesses as currently conducted by the Company
Group, and as currently proposed to be conducted, (iii) no loss or expiration of
any Proprietary Right or related group of Proprietary Rights is, to the
Company's knowledge, threatened, or is pending or reasonably foreseeable, (iv)
the Company Group has not received any notices of, nor is the Company aware
9
of any facts which indicate a reasonable likelihood of any infringement or
misappropriation by, or conflict with, any third party with respect to any of
the Proprietary Rights including, without limitation, any demand or request by
the Company Group that such third party license any of the Proprietary Rights
from the Company Group or to the Company Group, (v) the Company Group has not
infringed, misappropriated or otherwise conflicted with any rights including
intellectual property rights, of any third parties and the Company is not aware
of any infringement, misappropriation or conflict by the Company Group of any
third-party patent, trademark, copyright or other intellectual property right,
or of any such infringement, misappropriation or conflict which shall occur as a
result of the continued operation of the business by the Company Group, as
currently conducted or as currently proposed to be conducted, and there is no
demand or request from a third party that the Company Group take a license under
any intellectual property right; and (vi) none of the Proprietary Rights owned
by or licensed to the Company Group are, to the best knowledge of the Company,
being infringed, misappropriated or conflicted by any third party.
(d) All of the Proprietary Rights are owned by, or properly assigned
or licensed to, the Company Group or use thereof is otherwise authorized. The
Company has not disclosed, and is not aware of any disclosure by any other
Person of any of its trade secrets or confidential information to any third
party other than pursuant to a written confidentiality agreement or disclosure
to the Company's shareholders.
4.13 Material Contracts.
------------------
(a) Except as set forth on Schedule 4.13, neither the Company
Group nor any of its respective properties or assets is a party to or bound by
any (i) material Contract not made in the ordinary course of business, (ii) any
Contract involving a commitment or payment in excess of $50,000 or otherwise
material to the business of the Company; (iii) employment, consulting,
non-competition, severance, "golden parachute" or indemnification Contract
involving, annual payments of more than $50,000 or $250,000 in the aggregate
(including, without limitation, in each case any Contract to which the Company
Group is a party involving employees of the Company); (iv) Contract among
shareholders of granting a right of first refusal or for a partnership or a
joint venture or for the acquisition, sale or lease of any assets or capital
stock of the Company Group or any other Person or involving a sharing of
profits; (v) mortgage, pledge, conditional sales contract, security agreement,
factoring agreement or other similar Contract with respect to any real or
tangible personal property of the Company Group; (vi) loan agreement, credit
agreement, promissory note, guarantee, subordination agreement, letter of credit
or any other similar type of Contract; (vii) Contract with any Governmental
Body; (viii) Contract with respect to the discharge, storage or removal of
Hazardous Materials; or (ix) binding commitment or agreement to enter into any
of the foregoing. The Company has delivered or otherwise made available to each
Purchaser true, correct and complete copies of the Contracts listed on Schedule
4.13 (except as noted thereon), together with all amendments, modifications,
supplements or side letters affecting the obligations of any party thereunder.
10
(b) (i) Each of the Contracts listed on Schedule 4.13 is valid and
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and there is no default under any Contract
listed on Schedule 4.13 by the Company Group or, to the best knowledge of the
Company, by any order party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
thereunder.
(ii) No previous or current party to any Contract has given
notice to the Company Group of or made a claim with respect to any breach or
default thereunder and the Company is not aware of any notice of or claim to
any such breach or default.
(c) With respect to the Contracts listed on Schedule 4.13 that were
assigned to the Company Group by a third party, all necessary consents to such
assignment have been obtained.
4.14 Employee Benefits.
-----------------
(a) Schedule 4.14 sets forth a complete and correct list of all
"employee benefit plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and any other pension plans
or employee benefit arrangements or payroll practices (including, without
limitation, severance pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation, stock option, stock purchase arrangements or policies) maintained
by the Company Group or any trade or business (whether or not incorporated)
which is under common control with the Company Group or is treated as a single
employer under Section 4.14(b), (c), (m) or (o) of the Code ("ERISA Affiliate")
or to which the Company Group contributes or is obligated to contribute
thereunder with respect to the Company Group's employees, consultants, agents
and ex-employees and their dependents and beneficiaries ("Employee Benefit
Plans"). Schedule 4.14 clearly identifies, in separate categories, Employee
Benefit Plans that are (i) subject to Section 4063 and 4064 of ERISA ("Multiple
Employer Plans"), (ii) multiemployer plans (as defined in Section 4001(a) of
ERISA) ("Multiemployer Plans") or (iii) welfare plans providing continuing
benefits after the termination of employment (other than as required by Section
4980B of the Code and at the former employee's own expense).
(b) Neither the Company Group nor any ERISA Affiliate contributes or
has contributed to any Multiple Employer Plan or Multiemployer Plan.
(c) Each of the Employee Benefit Plans intended to qualify under
Section 401 of the Code ("Qualified Plans") so qualifies, and, except as
disclosed on Schedule 4.14, nothing has occurred with respect to the operation
of any such plan which could cause the loss of such qualification or the
imposition of any liability, penalty or tax under ERISA or the Code. All
contributions and premiums required by law or by the terms of any Employee
Benefit Plan or any agreement relating thereto have been timely made (without
regard to any waivers granted
11
with respect thereto), and no accumulated funding deficiencies exist in any of
the Employee Benefit Plans subject to Section 412 of the Code.
(d) There has been no material violation of ERISA with respect
to the filing of applicable returns, reports, documents and notices regarding
any of the Employee Benefit Plans with the Secretary of Labor or the Secretary
of the Treasury or the furnishing of such notices or documents to the
participants or beneficiaries of the Employee Benefit Plans.
(e) Each of the Employee Benefit Plans has been maintained, in
all material respects, in accordance with its terms and all provisions of
applicable Law. All amendments and actions required to bring each of the
employee Benefit Plans into conformity in all material respects with all of the
applicable provisions of ERISA and other applicable Laws have been made or
taken except to the extent that such amendments or actions are not required by
law to be made or taken until a date after the Closing Date.
(f) Neither the Company Group nor any ERISA Affiliate
maintains a welfare benefit plan providing continuing benefits after the
termination of employment (other than as required by Section 4980B of the Code
and at the former employee's own expense) except as provided on Schedule 4.14(a)
and the Company Group and each ERISA Affiliate has complied with the notice and
continuation requirements of Section 4980B of the Code and the regulations
thereunder.
(g) Neither the Company Group nor any ERISA Affiliate
maintains or has maintained a defined benefit plan (within the meaning of
Section 3(35) or ERISA) or has divested any business or entity maintaining or
sponsoring a defined benefit pension plan having unfunded benefit liabilities
(within the meaning of Section 4001(a)(18) of ERISA) or transferred any such
plan to any person other than an ERISA Affiliate during the five-year period
ending on the Closing Date.
(h) Except as set forth on Schedule 4.14, none of the Employee
Benefit Plans listed thereon provides for additional or accelerated payments or
other consideration to be made on account of the transactions contemplated
hereby.
4.15 Employees.
---------
To the best of the Company's knowledge, no key executive
employee and no group of employees or independent contractors of the Company
Group has any plans to terminate his, her or its employment or relationship as
an independent contractor with the Company Group. The Company Group has complied
in all material respects with all applicable laws relating to the employment of
personnel and labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining and the payment of social security and
other taxes, the Worker Adjustment and Retraining Act, and the Immigration
Reform and Control Act of 1986. The Company Group is not a party to or bound by
any collective bargaining agreement, nor has it experienced any strikes,
grievances, unfair labor practices claims or other material employee or labor
disputes. The Company Group has not engaged in any unfair labor practice. The
Company has no knowledge of any organizational effort presently
12
being made or threatened by or on behalf of any labor union with respect to
employees of the Company Group.
4.6 Litigation.
----------
There are no Legal Proceedings pending or, to the best knowledge
of the Company, threatened that question the validity of this Agreement or the
Transaction Documents or any action taken or taken by the Company Group in
connection with the consummation of the transactions contemplated hereby or
thereby. Schedule 4.16 sets forth a true, correct and complete list of all Legal
Proceedings pending or, to the best knowledge of the Company, threatened against
or affecting the Company Group or any properties or assets (including Employee
Benefit Plans) of the Company Group, at law or in equity, and there is no
reasonable basis for any such Legal Proceeding. There is no outstanding or, to
the best knowledge of the Company Group, threatened Order of any Governmental
Body against, affecting or naming the Company Group or affecting any of its
properties or assets.
4.17 Compliance with Laws: Permits.
-----------------------------
(a) The Company Group is and at all times has been in
compliance in all material respects with all Laws and Orders promulgated by any
Governmental Body applicable to the Company Group or to the conduct of the
business or operations of the Company Group or the use of its properties
(including any leased properties) and assets. The Company Group has not received
and the Company does not know of the issuance of, any notices of violation or
alleged violation of any such Law or Order by any Governmental Body.
(b) The Company Group has all Permits necessary for the
necessary for the conduct of its business. After consummation of the
transactions contemplated by the Teleglobe Agreement, including the
Reorganization (as defined therein) and the exercise of the GNI Option (as
defined therein), the Company Group will continue to have all Permits necessary
for the conduct of its business as conducted on the Closing Date. Schedule 4.17
lists all material Permits of the Company Group obtained from all Governmental
Bodies, indicating, in each case, the expiration date thereof, which are
required by the nature of the operations of the Company Group to permit the
operation thereof in the manner in which they are currently conducted. Such
Permits have been issued pursuant to valid applications by the Company Group to
the appropriate Governmental Bodies made in compliance in all material respects
with all applicable Laws, and the Company Group has fully complied with all
material conditions of such Permits applicable to it. No default or violation,
or event that with the lapse of time or giving of notice or both would become a
default or violation, has occurred in the due observance by the Company Group of
any such Permit. All such Permits are in full force and effect without further
consent or approval of any Person. The Company Group has not received any notice
from any source to the effect that there is lacking any such Permit required in
connection with the current operations of the Company Group.
4.18 Environmental Matters. (a) Except as set forth on
---------------------
Schedule 4.18, the operations of the Company Group have been in compliance with
all Environmental Laws; (b) the Company Group has obtained, currently maintains
all Environmental Permits necessary for
13
its operations; all such Environmental Permits are in good standing; there are
no Legal Proceedings pending or, to the best knowledge of the Company,
threatened to revoke any such Environmental Permit; the Company Group is in
compliance with such Environmental Permits; and the Company Group has not
received any notice from any source, or has otherwise obtained knowledge, to the
effect that there is lacking any Environmental Permit required in connection
with the current use or operation of any Real Property Lease; (c) the Company
Group and all of its past and current Facilities and operations are not subject
to any outstanding written Order or Contract, including Environmental Liens,
with any Governmental Body or Person, or to the best of the Company's knowledge
subject to any federal, state, local or foreign investigation respecting (A)
Environmental Laws, (B) any Remedial Action or (C) any Environmental Claim
arising from the Release or threatened Release of a Hazardous Material; (d) the
Company Group is not subject to any Legal Proceeding alleging the violation of
any Environmental Law or Environmental Permit; (e) the Company Group has not
received (nor, to the best knowledge of the Company, has there been issued) any
written communication, whether from a Governmental Body, citizens' group,
employee or any other Person, that alleges that the Company Group is not in
compliance with any Environmental Law or Environmental Permit; (f) the Company
Group has not caused or permitted any Hazardous Materials to remain or be
disposed of, either on or under real property legally or beneficially owned or
operated by the Company Group or on any real property not permitted to accept,
store or dispose of such Hazardous Materials; (g) the Company Group has no
liabilities with respect to Hazardous Materials, and no facts or circumstances
exist which, in the aggregate, could give rise to liabilities with respect to
Hazardous Materials; (h) none of the operations of the Company Group involves
the generation, transportation, treatment, storage or disposal of hazardous
waste or subject waste, as defined under 40 C.F.R. Parts 260-270 (in effect as
of the date of this Agreement); and (i) there is not now on or in any property
of the Company Group (l) any underground storage tanks or surface tanks, dikes
or impoundments; (2) any asbestos-containing materials or (3) any
polychlorinated biphenyls.
4.19 Investment Company Act. The Company is not, nor is it
----------------------
directly or indirectly controlled by or acting on behalf of any Person that is,
an investment company within the meaning of the Investment Company Act of 1940,
as amended.
4.20 Transactions with Affiliates. Except as set forth on
----------------------------
Schedule 4.20, the Company has not made any payment to, or received any payment
from, or made or received any investment in, or entered into any transaction
with, any Affiliate, including without limitation, the purchase, sale or
exchange of property or the rendering of any service, where the amount involved
is material to the business of the Company Group.
4.21 Teleglobe. The consummation of the transaction contemplated
---------
by the Teleglobe Agreement, including the Reorganization (as defined therein)
and the exercise of the GNI Option (as defined therein) shall not cause a
Material Adverse Change.
4.22 No Misrepresentation. No representation or warranty of the
--------------------
Company contained in this Agreement (including the schedules hereto) or in any
Transaction Document furnished to the Purchaser pursuant to the terms hereof
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the
14
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
4.23 Financial Advisors. No agent, broker, investment banker,
------------------
finder, financial advisor or other person acting on behalf of the Company or
under its authority is or will be entitled to any broker's or finder's fee or
any other commission or similar fee, directly or indirectly, in connection with
the transactions contemplated by this Agreement or any Transaction Document and
no Person is entitled to any fee or commission or like payment in respect
thereof based in any way on agreements, arrangements or understandings made by
or on behalf of the Company.
5. Representations and Warranties of the Purchasers. Each
------------------------------------------------
Purchaser hereby represents and warrants to the Company severally, for itself
only that:
5.1 Organization and Good Standing. Such Purchaser is duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation.
5.2 Authorization of Agreement. Such Purchaser has full
--------------------------
corporate or partnership power and authority to execute and deliver this
Agreement and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by such Purchaser in connection
with the consummation of the transactions contemplated hereby and thereby (the
"Purchaser Documents"), and to perform fully its obligations hereunder and
thereunder. The execution, delivery and performance by such Purchaser of this
Agreement and each Purchaser Document has been duly authorized by all necessary
corporate or partnership action on behalf of such Purchaser. This Agreement has
been, and each Purchaser Document will be at or prior to the Closing, duly
executed and delivered by such Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each Purchaser Document when so executed and delivered will
constitute, legal, valid and binding obligations of such Purchaser, enforceable
against such Purchaser in accordance with their respective terms.
5.3 Purchaser Representation. Such Purchaser has such knowledge
------------------------
and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Securities. Such
Purchaser has been given the opportunity to examine all documents provided by,
conduct due diligence and ask questions of, and to receive answer from, the
Company and its representatives concerning the terms and conditions of an
investment in the Securities.
5.4 Investment Intention. Such Purchaser is acquiring the
--------------------
Securities for its own account, for investment purposes only and not with a
view to the distribution (as such term is used in Section 2(11) of the
Securities Act) thereof in violation of the Securities Act, and that it is an
"accredited investor" within the meaning of Rule 501 of Regulation D of the
Securities and Exchange Commission. Such Purchaser understands that the
Securities have not been registered under the Securities Act and cannot be sold
unless subsequently registered under the Securities Act or an exemption from
such registration is available.
15
5.5 Financial Advisors. No agent, broker, investment banker,
------------------
finder, financial advisor or other person acting on behalf of such Purchaser or
under its authority is or will be entitled to any broker's or finder's fee or
any other commission or similar fee, directly or indirectly, in connection with
the transactions contemplated by this Agreement or any Transaction Document and
no Person is entitled to any fee or commission or like payment in respect
thereof based in any way on agreements, arrangements or understandings made by
or on behalf of such Purchaser.
6. Further Agreements of the Parties.
---------------------------------
6.1 Access to Information. For so long as a Purchaser owns 25% of
---------------------
the Underlying Common Stock issued to such Purchaser on the Closing Date, such
Purchaser shall be entitled, through one Person acting as the Representative of
all the Purchasers ("Purchasers' Representative") and upon reasonable notice, to
make such investigation of the properties, businesses and operations of the
Company (and its Subsidiaries) and such examination of the books, records and
financial condition of the Company as it reasonably requests and to make
extracts and copies of such books and records. Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances without material interference with the Company's normal
business operations, and the Company shall and shall cause its Subsidiaries
and its Subsidiaries and its employees to cooperate fully therein. In order that
such Purchaser may have full opportunity to make such physical, business,
accounting and legal review, examination or investigation as it may reasonably
request of the affairs of the Company (and its Subsidiaries), the Company shall
cause its Representative (and Representatives of its Subsidiaries) to cooperate
fully with such Purchasers' Representative in connection with such review and
examination; provided that the Company shall not incur any material expense
related thereto.
6.2 Covenants. For so long as a Purchaser owns 25% of the
---------
Underlying Common Stock issued to such Purchaser on the Closing Date:
(a) For so long as the Purchase Warrants or Contingent Warrants are
exercisable and until the Additional Purchase Agreement Shares, if any, have
been issued, the Company shall reserve that number of shares of Common Stock
issuable upon conversion of the Purchase Warrant or the Contingent Warrant or
issuable pursuant to Section 6.10, which shares shall not be subject to any
preemptive or other similar rights.
(b) The Company shall perform and observe all of its obligations to
each holder of Underlying Common Stock set forth in the Certificate of
Incorporation and the Company's by-laws.
(c) Prior to the Closing, the Company has amended its by-laws by
making Section 9.15 read as follows:
Section 9.15. Any shares of capital stock of the corporation
issued to Teleglobe USA, Inc. or the [Purchasers] or any of their affiliates
shall be Permanently Unrestricted Share Certificates and no such shares shall at
any time (whether or not
16
owned by the foregoing entities or any of their affiliates) be required to
bear any legend contained in this Article IX or be subject to any
restriction contained in this Article IX or any similar restriction.
6.3 Use of Proceeds. The Company shall use all of the proceeds from
---------------
the sale of the Securities under this Agreement only in the ordinary course of
operating the business of the Company (and its Subsidiaries).
6.4 Financial Statements, Other Information and Annual Budget. (a)
---------------------------------------------------------
The Company shall deliver to each Purchaser (so long as the Purchaser owns 25%
of the Underlying Common Stock issued to such Purchaser on the Closing Date):
(i) As soon as available and in any event within 45 days after
the close of each quarterly accounting period ending after the date hereof, the
consolidated balance sheet of the Company as of the end of such quarterly
period, and the related consolidated statements of income, shareholders' equity
and cash flows for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, and in each case
setting forth comparative figures for the related periods in the prior fiscal
year, all of which shall be certified by an authorized officer of the company to
have been prepared in accordance with GAAP (subject to normal year-end audit
adjustments in the case of statements for any quarterly accounting period).
(ii) As soon as available and in any event within 90 days after
the close of each fiscal year of the Company, the consolidated balance sheet of
the Company as of the end of such fiscal year end related consolidated
statements of income, shareholders' equity and cash flows for such fiscal year,
in each case setting forth comparative figures for the preceding fiscal year
and certified by independent certified public accountants of recognized
national standing to have been prepared in accordance with GAAP in the United
States.
(iii) Copies of all reports, notices or other written
communications (other than routine correspondence and responses to routine
inquiries) sent to holders of equity or debt securities of , or lenders to the
Company (or any of its Subsidiaries), promptly after any such communications are
sent.
(b) The Company will provide each Purchaser with such assistance as
such Purchaser reasonably requests from officers, employees and auditors of the
Company to enable such Purchaser to account for its investment in the Company in
its financial statements.
6.5 Confidentiality. Except as may be required by applicable law
---------------
neither the Company nor the Purchasers or any of their respective Affiliates
shall at any time divulge, disclose, disseminate, announce or release any
information to any person concerning this Agreement, the Transaction Documents
or the transactions contemplated hereby or thereby without first obtaining the
prior written consent of the other party hereto; provided, however, that each
Purchaser shall be entitled to disclose information with respect to its
investment in the Company on any reports such Purchaser furnishes to its
investors or as otherwise required by Law. In addition, the Company may disclose
information with respect to the transactions
contemplated hereby to its shareholders or pursuant to an offering of its
securities, provided, however, that the Company shall not disclose the name of
-------- -------
Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxx or any Affiliates thereof except as required
by Law (including in response to comments raised by the Securities Exchange
Commission with respect to the Company's filings therewith) or with the advance
consent of such Person that may be disclosed.
6.6 Other Actions. Each of the Company and the Purchaser agree to
-------------
execute and deliver such other documents and take such other acts, as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the Transaction Documents. Purchaser shall use reasonable efforts,
at no cost to themselves, to cooperate in the Company's efforts to undertake a
public offering of its stock.
6.7 Updating of Information. The Company shall promptly deliver to
-----------------------
each Purchaser any information concerning events subsequent to the date of this
Agreement which is necessary to supplement the information contained in or made
a part of the representations and warranties contained herein, including the
schedules hereto, or delivered by the Company pursuant to any of the covenants
contained herein, in order that the information contained herein or so delivered
be complete and accurate in all material respects as of the Closing Date.
Notwithstanding the preceding sentence, for purposes of determining the parties
rights and obligations under this Agreement, the schedules delivered by the
Company shall be deemed to include only that information contained therein on
the date of this Agreement.
6.8 Share Adjustment. If a Qualified Public Offering is not
----------------
consummated prior to one year after the Closing, then on the day immediately
following such one year date, the Company shall issue shares of Common Stock to
each Purchaser as indicated on Schedule 1, it being agreed that such number of
shares shall be adjusted in the same manner as the Warrant A Amount (as defined
in the Purchase Warrant) would be adjusted pursuant to Section 2 of the Purchase
Warrants.
6.9 Foreign Ownership. Purchasers will not transfer their Underlying
-----------------
Common Stock, Purchase Warrants or Contingent Warrants to any Person if such
transfer would, to the best knowledge of Purchasers after due inquiry, cause the
aggregate foreign ownership by Purchasers (or their transferees) of the Company,
as determined under the Communications Act of 1934, as amended (47 U.S.C. (S)151
et.seq.), and applicable rules and regulations of the Federal Communications
Commission, to exceed 75% of the aggregate ownership by Purchasers of the
Company. For all purposes of measuring such percentage, all Warrants which are
then or may become exercisable shall be deemed exercisable. If Purchasers
discover that a prior transfer conflicted with this Section 6.9, they shall
notify the Company of such information. Notwithstanding the above, this Section
shall not apply to transfer or sales to the public or in non-private
transactions.
6.10 Indemnity. (a) The Company agrees to indemnify, defend and hold
---------
harmless each Purchaser (and its partners (and each officer and director
thereof), directors, officers, members, shareholders, employees, affiliates,
agents and permitted assigns) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties, and
reasonable attorneys' fees, disbursements and related charges) (collectively,
18
"Losses") based upon, arising out of or otherwise in respect of any inaccuracy
in or breach of any representations, warranties, covenants or agreements of the
Company contained in this Agreement or the Transaction Documents.
(b) Each Purchaser agrees, severally, for itself only, to indemnify,
defend and hold harmless the Company (and its partners (and each officer and
director thereof), directors, officers, members, shareholders, employees,
affiliates, agents and permitted assigns) from and against any and all Losses
based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representations, warranties, covenants or agreements of each
Purchaser contained in this Agreement or the Purchaser Documents.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not materially prejudiced the indemnifying party) and (ii)
unless in such indemnifying party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. Such indemnifying
party shall not, however, enter into any settlement with a party without
obtaining an unconditional release of each indemnified party by such party with
respect to any and all claims against each indemnified party. If such defense is
assumed,the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
will not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim will not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other such indemnified parties with respect to such
claim.
(d) Purchasers shall not be entitled to assert any right of
indemnification hereunder for any Loss (except for such breaches as may have
been effected knowingly and willingly) if such Loss is less than $10,000, or all
Losses to date are less then $250,000, whereupon the Purchaser shall be entitled
to indemnification for all Losses suffered by the Purchaser (including the
first $10,000, individually, or $250,000 in the aggregate in Losses). In no
event shall the Company be liable for indemnification Losses in excess of the
sum of $16 million and the Warrant B Alternative Exercise Price (as defined in
the Purchase Warrant) paid by the Purchaser; provided, however, that such cap
shall not apply to Losses with respect to the representation given in the second
sentence of Section 4.5.
(e) The Company shall not be entitled to assert any right of
indemnification hereunder for any Losses (except for such breaches as may have
been effected knowingly and willingly) until the aggregate Losses suffered by
the Company exceeds $250,000, whereupon the Company shall be entitled to
reimbursement for all Losses suffered by the Company (including the first
$250,000).
19
(f) Notwithstanding anything to the contrary contained in this Section
6.10, if the Company shall have breached a representation contained in Section
4 of this Agreement (other than a breach with respect to Section 4.6) where such
breach has resulted solely from circumstances concerning the business or
financial condition of Axicor Pty Limited, the Company shall nevertheless only
be considered to have breached such representation to the extent such
circumstances constitute or result in a breach of a representation or warranty
made to, or a covenant agreement owed to, the Company or to its Subsidiaries
pursuant to the Axicorp Agreement (without giving effect to any waiver of such
breach or similar action, if any, by the Company or its Subsidiaries).
Notwithstanding anything else contained in this Section 6.10(f) to the contrary,
the foregoing sentence shall not limit the indemnification available to the
Purchasers pursuant to Section 6.10 for facts and circumstances concerning the
business or financial condition of Axicorp Pty Limited existing on or after
March 1, 1996. A determination as to whether the Company has breached the
representations contained in Section 4.6 of this Agreement shall be made without
regard to the first sentence of this Section 6.10(f).
7. Documents to be Delivered at the Closing.
----------------------------------------
7.1 Documents to be Delivered by the Company. At the Closing, the
-----------------------------------------
Company shall deliver, or cause to be delivered, to each Purchaser the
following:
(a) Permanently Unrestricted Share Certificate(s) representing the
Shares and the Purchase Warrant and the Contingent Warrant, as contemplated by
Schedule I;
(b) the opinions of Pepper, Xxxxxxxx & Xxxxxx and Xxxxxxx and Berlin,
Chartered, in form and substance satisfactory to Purchaser;
(c) Securityholder's Agreement among the Company, the Purchasers and K.
Xxxx Xxxxx;
(d) Registration Rights Agreement among the Company and the Purchasers;
(e) Purchase Warrants issued by the Company to each Purchaser;
(f) Contingent Warrants issued by the Company to each Purchaser;
(g) a letter agreement in favor of the Purchasers, signed by Xxxx
DePodestra and Xxxxxx Xxxxxxx, reflecting their agreement to vote for the
Purchaser's nominee on the Board of Directors;
(h) certificates of good standing with respect to the Company and each
Subsidiary issued by the secretaries of state of the appropriate jurisdictions;
copies, certified by the secretary or assistant secretary as being a true and
complete copy as of the Closing Date, of the by-laws of the Company; and copies
certified by the Secretary of State of Deleware of the Certificate of
Incorporation of the Company;
(i) copy of resolutions of the board of directors of the Company
authorizing the execution, delivery and performance of this Agreement, and a
certificate of its secretary, dated the Closing Date, that such resolutions were
duly adopted and are in full force and effect and attesting to the true
signatures and to the incumbency of the officers of the Company executing this
Agreement and Transaction Documents; and
(j) such other documents as the Purchaser shall reasonably request.
7.2 Delivery of Purchase Price. At the Closing, each Purchaser shall
---------------------------
deliver its Purchase Price by wire transfer.
7.3 Pre-Closing Deliveries. With respect to all deliveries required to
-----------------------
be made to Purchasers' prior to the Closing pursuant to the terms of this
Agreement, delivery by the Company to The Chatterjee Group shall constitute
delivery to the Purchasers.
8. Miscellaneous.
--------------
8.1 Survival of Representations and Warranties. The parties hereto
-------------------------------------------
hereby that the representations and warranties contained in this Agreement
shall survive for a period of two years following the Closing hereunder,
regardless of any investigation made by the parties hereto; provided, that the
representation and warranties set forth in (i) the second sentence of Section
4.5 shall survive indefinitely and (ii) Sections 4.9 and 4.18 shall survive
until the expiration of the applicable statute of limitation. Notwithstanding
the preceding sentence, if notice of the inaccuracy or breach of any
representation or warranty in respect of which indemnification is sought under
this Agreement shall have been given to the party against whom such indemnity
may be sought prior to the time at which a claim under such representation or
warranty would otherwise terminate pursuant to the preceding sentence, such
claim shall survive such time. The covenants and other agreements contained
herein shall survive indefinitely.
8.2 Certain Definitions.
--------------------
"Axicorp Agreement" means the Share Acquisition Deed, made 1st March
-----------------
1996, between Primus Telecommunications International, Inc., a company
incorporated in Deleware, the shareholders of Axicorp Pty Limited as set out in
schedule 1 to such agreement and the persons set out in schedule 1 to such
agreement, and the documents incorporated by reference therein.
"Affiliate" of any Person means any Person that directly or indirectly
---------
controls, or is under common control with, or is controlled by, such Person. As
used in this definition, "control" (including with its correlative meanings,
"controlled by" and "under common control with") shall mean the possession,
------------- -------------------------
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise). With
respect to the Purchaser, the term "Affiliate" shall include one or more of
Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxx,
Chatterjee Fund Management or Xxxxx Fund Management of affiliates thereof, and
any person or entity for which any such person or entity acts as investment
advisor or investment manager.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
----
and regulations promulgated thereunder.
"Contingent Warrant" means a Contingent Warrant, issued to each Purchaser
------------------
substantially in the form hereto as Exhibit II.
"Contract" means any contract agreement, indenture, note, bond, loan,
--------
instrument, lease, conditional sale contract, mortgage, license, franchise,
insurance policy, commitment or other arrangement or agreement, whether written
or oral.
"Environmental Claim" means any accusation, allegation, notice of
-------------------
violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by a Governmental Body or any Person or personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions
resulting from or based upon (i) the existence, or the continuation of the
existence, of a Release (including, without limitation, sudden or non-sudden
accidental or non-accidental Releases) of, or exposure to, any Hazardous
Material or other substance, chemical, material, pollutant, contaminant, odor,
audible noise, or other Release in, into or onto the environment (including,
without limitation, the air, soil, surface water or groundwater) at, in, by,
from or related to the Facilities or any activities conducted thereon; (ii) the
environmental aspects of the transportation, storage, treatment or disposal of
Hazardous Materials in connection with the operation of the Facilities; or (iii)
the violation, or alleged violation, of any Environmental Laws, Orders or
Permits of or from any Governmental Body relating to environmental matters
connected with the Facilities.
"Environmental Law" means any Law concerning Releases into any part of the
-----------------
natural environment, or activities that might result in damage to the natural
environment, or any Law that is concerned in whole or in fact with the natural
environment and with protecting or improving the quality of the natural
environment and protecting public and employee health and safety and includes,
but is not limited to the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERLA") (42 U.S.C. $ 9601 et seq.), the Hazardous Materials
-- ---
Transportation Act (49 U.S.C. $1801 et seq.), the Resource Conservation and
-- ---
Recovery Act (42 U.S.C. $ 6901 et seq.), the Clean Water Act (33 U.S.C. $ 1251
-- ---
et seq.), the Clean Air Act (33) U.S.C. $ 7401 et seq.), the Toxic Substances
-- --- -- ---
Control Act (15 U.S.C. $ 2601 et seq.), the Federal Insecticide, Fungicide, and
-- ---
Redenticide Act (7 U.S.C. $ 136 et seq.) and the Occupational Safety and Health
-- ---
Act (29 U.S.C. $ 651 et seq.) ("OSHA"), as such laws have been amended or
-- ---
supplemented, and the regulations promulgated pursuant thereto, and any and all
analogous state or local statutes, and the regulations promulgated pursuant
thereto, and any and all treaties, conventions and environmental public and
employee health and safety statutes and regulations or analogous requirements of
non-United States jurisdiction in which the Company (or any of its Subsidiaries)
conducts any business.
"Environmental Matters" means any matter arising out of or relating to
---------------------
the production, storage, transportation, disposal or Release of any Hazardous
Material or otherwise arising out of or relating to safety, health or the
environment which could give rise to liability or require the expenditure of
money to address, and shall include, without limitation, the costs of
investigating and remedying any of the foregoing matters, any fines and
penalties arising in connection therewith, and any claim in respect thereof for
damages or injunctive relief for alleged personal injury, property damage or
damage to natural resources under common law or other Environmental Law.
"Environmental Permit" means any Permit, variance, registration, or
--------------------
permission required under any applicable Environmental Laws.
"Facility" means real property owned, leased or operated by the Company
--------
(or any of its Subsidiaries).
"GAAP" means generally accepted accounting principles, as in effect in
----
the United States.
"Governmental Body" means any government or governmental or regulatory
-----------------
body thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
"Hazardous Materials" means any substance, material or waste which is
-------------------
regulated by any local, state or federal Governmental Body in the jurisdiction
in which the Company (or any of its Subsidiaries) conducts business, or the
United States, including, without limitation, any material or substance which
is defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste" or "restricted hazardous waste," "subject waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law, including but not limited to, petroleum products, asbestos
and polychlorinated biphenyls.
"Law" means any federal, local or foreign law (including common law),
---
statute, code, ordinance, rule, regulation or other requirement or guideline.
"Legal Proceeding" means any judicial, administrative or arbitral
----------------
action, suits, proceedings (public or private), claims of governmental
proceedings.
"Lien" means any lien, pledge, hypothecation, levy, mortgage, deed of
----
trust, security interest, claim, lease, charge, option, right of first refusal,
easement, or other real estate declaration, covenant, condition, restriction or
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in the
-----------------------
business, properties, results of operations, prospects or condition (financial
or otherwise) of the Company or its Subsidiaries, in the aggregate.
23
"Order" means any order, injunction, judgement, decree, ruling, writ,
-----
assessment or arbitration award.
"Permits" means any approvals, authorizations, consents, licenses,
-------
permits or certificates by any Governmental Body.
"Person" means any individual, corporation, partnership, firm, joint
------
venture, association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
"Qualified Public Offering" means an underwritten public offering of
-------------------------
shares of Common Stock pursuant to an effective Registration Statement under the
Securities Act of 1933, as then in effect or any comparable statement under any
similar federal statute then in force or effect, pursuant to which at least
1,000,000 shares of Common Stock at a price per share of at least $35 (before
underwriting commissions).
"Registration Rights Agreement" means the Registration Rights Agreement,
-----------------------------
by and among the Company and the Purchasers.
"Release" means any release, spill, effluent, emission, leaking,
-------
pumping, injection, deposit, disposal, discharge, dispersal, leaching, or
migration into the indoor or outdoor environment, or into or out of any property
owned, operated or leased by the Company (or any Subsidiary,) including the
movement of any Hazardous Material or other substance through or in the air,
soil, surface water, groundwater, or property.
"Remedial Action" means all actions, including, without limitation, any
---------------
capital expenditures, required or voluntarily undertaken to (i) clean up,
remove, treat, or in any other way address any Hazardous Material or other
substance in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release, or minimize the further Release of any Hazardous Material or
other substance so it does not migrate or endanger or threaten to endanger
public health or welfare of the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv) bring any Facility into compliance with all Environmental Laws and
Environmental Permits.
"Representatives" of a Person means its officers, employees, agents,
---------------
legal advisors and accountants.
"Securityholders' Agreement" means the Securityholders' Agreement, by
--------------------------
and among the Company, the Purchasers and K. Xxxx Xxxxx.
"Subsidiary" means any Person of which a majority of the outstanding
----------
voting securities are owned directly or indirectly by the Company.
"Taxes" means all taxes, charges, fees, imposts, levies or other
-----
assessments, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll,
24
environmental, employment, social security, unemployment, excise, severance,
stamp, occupation, property and estimated taxes, customs duties, fees,
assessments and charges of any kind whatsoever, together with any interest and
any penalties, fines, additions to tax or additional amounts imposed by any
taxing authority (domestic or foreign) and shall include any transferee
liability in respect of Taxes.
"Tax Return" means all returns, declarations, reports, estimates,
----------
information returns and statements required to be filed in respect of any Taxes
or applicable Tax Law.
"Teleglobe Agreement" means the Security Purchase and Option Agreement,
-------------------
dated as of January 12, 1996, among Teleglobe USA, Inc., the Company, Primus
Holding Corporation and GTI Networks Inc., as amended.
"Underlying Common Stock" means (i) the Shares, (ii) the shares of
-----------------------
Common Stock issued or issuable pursuant to Section 6.10, (iii) any shares of
Common Stock issued or issuable upon exercise of the Purchase Warrants or
the Contingent Warrants issued to the Purchasers pursuant to this Agreement and
(iv) any Common Stock issued or issuable with respect to the securities referred
to in clauses (i), (ii) or (iii) above by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. For purposes of this Agreement, any
Person who holds the Purchase Warrants or the Contingent Warrants referred to in
the previous sentence shall be deemed to be the holder of the Underlying Common
Stock obtainable upon exercise of such Purchase Warrants or Contingent Warrants
regardless of any restriction or limitation on the exercise of the Purchase
Warrants or Contingent Warrants, and such Underlying Common Stock shall be
deemed to be in existence, and such Person shall be entitled to exercise the
rights of a holder of Underlying Common Stock here under. As to any particular
shares of Underlying Common Stock, such shares shall cease to be Underlying
Common Stock when they have been (a) effectively registered under the Securities
Act and disposed of in accordance with the registration statement covering them,
(b) distributed to the public through a broker, dealer or market maker pursuant
to Rule 144 under the Securities Act (or any similar provision then in force) or
(c) repurchased by the Company (or any Subsidiary.)
8.3 Expenses. The Company shall pay the fees and expenses of the
--------
Purchasers in accordance with the terms of that certain letter dated July 8,
1996 from The Chatterjee Group to the Company. In addition, the Company shall
pay all stamp and other taxes which may be payable in respect of the execution
and delivery of this Agreement, the Transaction Documents, the Purchaser
Documents or the issuance, delivery or acquisition of any Common Stock.
8.4 Specific Performance. The Company acknowledges and agrees that the
--------------------
breach of this Agreement would cause irreparable damage to the Purchasers and
that the Purchasers will not have an adequate remedy at law. Therefore, the
obligations of the Company under this Agreement, including, without limitation,
the Company's obligation to sell the Securities to the Purchasers, shall be
enforceable by a decree of specific performance issued by any court of competent
jurisdiction, and appropriate injunctive relief may be applied for and granted
in connection therewith. Such remedies shall, however, be cumulative and not
exclusive
25
and shall be in addition to any other remedies which any party may have under
this Agreement or otherwise.
8.5 Further Assurances. The Company and the Purchasers each
------------------
agree to execute and deliver such other documents or agreements as may be
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
8.6 Submission to Jurisdiction: Consent to Service of Process.
---------------------------------------------------------
(a) The parties hereto hereby irrevocably submit to the non-
exclusive jurisdiction of any federal or state court located within the Borough
of Manhattan, State of New York over any dispute arising out of or relating to
this Agreement or any of the transactions contemplated hereby and each party
hereby irrevocably agrees that all claims in respect of such dispute or any
suit, action or proceeding related thereto may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action of proceeding by the
mailing of a copy thereof in accordance with the provisions of Section 8.10.
8.7 Entire Agreement: Amendments and Waivers. This Agreement
----------------------------------------
(including the schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific
reference to the Agreement signed by the parties hereto. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or subsequent
breach. No failure on the part of any party to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right, power or remedy
by such party preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. Al remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law.
8.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without giving
effect to the principles of conflict of laws thereunder which would specify the
application of the law of another jurisdiction.
26
8.9 Table of Contents; Headings; Interpretive Matters. The
-------------------------------------------------
table of contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement. No provision of this Agreement will be
interpreted in favor of, or against, any of the parties hereto by reason of the
extent to which any such party or its counsel participated in the drafting
thereof or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof or thereof.
8.10 Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed given when delivered
personally, telecopied or mailed by certified mail, return receipt requested, to
the parties at the following addresses (or to such other address as a party may
have specified by notice given to the other party pursuant to this provision):
If to the Company, to:
Primus Telecommunications Group, Incorporated
0000 Xxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: K. Xxxx Xxxxx
With a copy (which shall by itself not constitute notice) to:
Pepper, Xxxxxxxx & Xxxxxxx
3000 Two Xxxxx Square
Eighteenth and Xxxx Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
If to the Purchasers, to the address listed in Schedule 1.
With a copy (which shall by itself not constitute notice) to:
Akin, Gump, Strauss, Xxxxx
& Xxxx, L.L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
All notices are effective upon receipt or upon refusal if properly delivered.
8.11 Severability. If any provision of this Agreement is invalid
------------
or unenforceable, the balance of this Agreement shall remain in effect.
27
8.12 Binding Effect; Assignment. This Agreement shall be binding
--------------------------
upon and inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to
create any third-party beneficiary rights in any person or entity not a party to
this Agreement except as provided below. No assignment of this Agreement or of
any rights or obligations hereunder may be made by the Company or the Purchaser
(by operation of law or otherwise) without the prior written consent of the
other parties hereto and any attempted assignment without the required consents
shall be void.; provided, however, that the Purchasers may assign this Agreement
-------- -------
and any or all rights and obligations hereunder, in whole or in part, to any
Affiliate of the Purchasers, but any such assignment shall not relieve the
Purchasers of its obligations hereunder. In addition, and whether or
not any express assignment has been made, the provisions of this Agreement which
are for the benefit of any Purchaser as a purchaser or holder of Underlying
Common Stock are also for the benefit of and enforceable by, any subsequent
holder of such Underlying Common Stock. Upon any permitted assignment, the
references in this Agreement to the Purchasers shall also apply to any such
assignee unless the context otherwise requires.
8.13 Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
By: /s/ K. Xxxx Xxxxx
------------------------
Name: K. Xxxx Xxxxx
Title: CEO and President
QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Attorney-in-Fact
S-C PHOENIX HOLDINGS, L.L.C.
By: /s/ Xxxxxxx X. Xxxx
------------------------
Name: Xxxxxxx X. Xxxx
Title: Attorney-in-Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors L.L.C.
its manager
By: /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: Manager
WINSTON PARTNERS II LDC
By: /s/ Xxxxx Xxxxxxx
------------------------
Name: Xxxxx Xxxxxxx
Title: Attorney-in-Fact
29
Schedule 1
----------
SCHEDULE OF PAYMENTS AND SECURITIES
Number Purchase Price Purchase Price for Shares Issuable
Purchaser of Shares ($28 per share) Purchase Warrant Purchase Warrant Pursuant to Section 6.8
--------- --------- --------------- ---------------- ------------------ -----------------------
142,857 $3,999,996 Warrant A - 50,000 $4,000,000 Such number of shares
1. Quantum Industrial Partners LDC Warrant B - such that the average
$5,000,000 + 42,857 price of all Shares
Address: purchased hereby and
shares issued pursuant
Curacao Corporation Company N.V. to the Purchase Warrant
Kaya Flamboyan 9 equals $18
Willernstad, Curacao
Netherlands Antilles
Facsimile No.: 599-9-322-001
With a copy (which shall by itself not
constitute notice) to:
Xxxxx Fund Management
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile No.: (000)000-0000
Up to an aggregate ownership of Shares, Common Stock issued pursuant to
Section 6.8 and Common Stock issued pursuant to the Purchase Warrant which as of
the date hereof equals 444,444 (subject to adjustment as provided for in such
Section).
Number Purchase Price Purchase Price for Shares Issuable
Purchaser of Shares ($28 per share) Purchase Warrant Purchase Warrant Pursuant to Section 6.8
--------- --------- --------------- ---------------- ------------------ -----------------------
85,714 $2,399,992 Warrant A - 30,000 $2,400,000 Such number of shares
2. S-C Phoenix Holdings, L.L.C. Warrant B - such that the average
$3,000,000 + 25,714 price of all Shares
Address: purchased hereby and
shares issued pursuant
S-C Phoenix Holdings, L.L.C. to the Purchase Warrant
c/o The Chatterjee Group equals $18/2/
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx
Xxxxx Xxxxxxx
Facsimile No.: (000)000-0000
With a copy (which shall by itself not
constitute notice) to:
Xxxxx Fund Management
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile No.: (000)000-0000
/2/Up to an aggregate ownership of Shares, Common Stock issued pursuant to
Section 6.8 and Common Stock issued pursuant to the Purchase Warrant which as of
the date hereof equals 266,669 (subject to adjustment as provided for in such
Section).
Number Purchase Price
Purchaser of Shares ($28 per share) Purchase Warrant
--------- --------- --------------- ----------------
3. Winston Partners II L.L.C. 17,857 499,996 Warrant A - 6,250
Warrant B -
Address: $625,000 + 5,357
Chatterjee Advisors L.L.C.
c/o The Chatterjee Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx
Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Purchase Price for Shares Issuable
Purchaser Purchase Warrant Pursuant to Section 6.8
--------- ------------------ -----------------------
3. Winston Partners II L.L.C. $500,000 Such number of shares
such that the average
Address: price of all Shares
purchased hereby and
Chatterjee Advisors L.L.C. shares issued pursuant
c/o The Chatterjee Group to the Purchase Warrant
000 Xxxxxxx Xxxxxx equals $18/3/
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx
Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
--------------------------------------------------------------------------------
================================================================================
---------------------
/3/Up to an aggregate ownership of Shares, Common Stock issued pursuant to
Section 6.8 and Common Stock issued pursuant to the Purchase Warrant which as of
the date hereof equals 55,556 subject to adjustment as provided for in such
Section).
Number Purchase Price
Purchaser of Shares ($28 per share) Purchase Warrant
-------- --------- --------------- ----------------
4. Winston Partner II LDC 39,286 $1,100,008 Warrant A - 13,750
Warrant B -
Address: $1,375,000 + 10,714
Curacao Corporation Company N.V.
Xxxx Xxxxxxxxx 0
Xxxxxxxxxx, Xxxxxxx
Xxxxxxxxxxx Antilles
Facsimile No.: 599-9-322-001
With a copy (which shall by itself not
constitute notice) to:
The Chatterjee Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx
Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Purchase Price for Shares Issuable
Purchaser Purchase Warrant Pursuant to Section 6.8
-------- ------------------ -----------------------
4. Winston Partner II LDC $1,100,000 Such number of shares
such that the average
Address: price of all Shares
purchased hereby and
Curacao Corporation Company N.V. shares issued pursuant
Kaya Flamboyan 9 to the Purchase Warrant
Willemstad, Curacao equals $18/4/
Netherlands Antilles
Facsimile No.: 599-9-322-001
With a copy (which shall by itself not
constitute notice) to:
The Chatterjee Group
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxx Xxxx
Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
------------------------------------
/4/Up to an aggregate ownership of Shares, Common Stock issued pursuant to
Section 6.8 and Common Stock issued pursuant to the Purchase Warrant which as of
the date hereof equals 122,222 (subject to adjustment as provided for in such
Section).
