Exhibit 1.2
6,000,000 Shares
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
------------------------------------
_____ __, 1996
Xxxxxx Brothers International (Europe)
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
As Lead Managers of the several
International Managers named in Schedule 1,
c/x Xxxxxx Brothers International (Europe)
Xxx Xxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Ladies & Gentlemen:
Primus Telecommunications Group, Incorporated, a Delaware corporation
(the "Company"), proposes to sell 1,200,000 shares (the "Firm Stock") of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"). In
addition, the Company proposes to grant to the International Managers named in
Schedule 1 hereto (the "International Managers") an option to purchase up to an
additional 180,000 shares of the Common Stock on the terms and for the purposes
set forth in Section 3 (the "Option Stock"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "Stock." This is
to confirm the agreement concerning the purchase of the Stock from the Company
by the International Managers.
It is understood by all parties that the Company is concurrently
entering into an agreement dated the date hereof (the "U.S. Underwriting
Agreement") providing for the sale by the Company of an aggregate of 5,520,000
shares of Common Stock (including the over-allotment option thereunder) (the
"U.S. Stock") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters"), for whom Xxxxxx Brothers Inc. and
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation are acting as
representatives (the "Representatives"). The U.S. Underwriters and the
International Managers
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simultaneously are entering into an agreement between the U.S. and international
underwriting syndicates (the "Agreement Between U.S. Underwriters and
International Managers") which provides for, among other things, the transfer of
shares of Common Stock between the two syndicates. Two forms of prospectus are
to be used in connection with the offering and sale of shares of Common Stock
contemplated by the foregoing, one relating to the Stock and the other relating
to the U.S. Stock. The latter form of prospectus will be identical to the
former except for certain substitute pages as included in the registration
statement and amendments thereto referred to below. Except as used in Sections
2, 3, 4, 10 and 11 herein, and except as the context may otherwise require,
references herein to the Stock shall include all the shares of which may be sold
pursuant to either this Agreement or the U.S. Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 (File No. 333-10875), and
amendments thereto, with respect to the Stock have (i) been prepared by the
Company in conformity with the requirements of the United States Securities
Act of 1933 (the "Securities Act") and the rules and regulations (the
"Rules and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and the amendments
thereto have been delivered by the Company to you as the lead managers (the
"Lead Managers") of the International Managers. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendments thereto, if any,
was declared effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each prospectus
included in such registration statement, or amendments thereof, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement" means
such registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5(a) hereof and deemed to be a part of the registration statement
as of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations and includes any registration statement relating to
the Stock that is filed and declared effective pursuant to Rule 462(b)
under the Securities Act; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
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(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
concerning the International Managers furnished to the Company through the
Lead Managers by or on behalf of any International Manager specifically for
inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section
15) have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses as currently conducted requires such qualification, and have all
power and authority necessary to own or hold their respective properties
and to conduct the businesses in which they are engaged; and none of the
subsidiaries of the Company (other than Primus Telecommunications, Inc. and
Axicorp Pty., Ltd. (collectively, the "Significant Subsidiaries")) is a
"significant subsidiary," as such term is defined in Rule 405 of the Rules
and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the International Managers hereunder and to the U.S.
Underwriters under the U.S. Underwriting Agreement have been duly and
validly authorized and, when issued and delivered against payment therefor
as provided herein and in the U.S. Underwriting Agreement, will be duly and
validly issued, fully paid and non-assessable; and the Stock will conform
to the description thereof contained in the Prospectus.
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(f) Each of this Agreement and the International Underwriting
Agreement has been duly authorized, executed and delivered by the Company.
(g) The execution, delivery and performance of this Agreement and
the U.S. Underwriting Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets; and except for
the registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the United States Securities Exchange Act of 1934 (the
"Exchange Act") and applicable state securities laws in connection with the
purchase and distribution of the Stock by the International Managers and
the U.S. Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or body
is required for the execution, delivery and performance of this Agreement
or the U.S. Underwriting Agreement by the Company and the consummation of
the transactions contemplated hereby and thereby.
(h) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement.
(i) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(j) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business (x) from
fire, explosion, flood or other calamity,
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whether or not covered by insurance, or (y) from any labor dispute or court
or governmental action, order or decree, in either case otherwise than as
set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(k) The historical financial statements (including the related notes
and supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except that the unaudited historical
financial statements are subject to normal year-end adjustments. The
unaudited pro forma financial information set forth in the Prospectus
presents fairly, on the basis stated in the Prospectus, the information set
forth therein, has been prepared in accordance with the Rules and
Regulations and the guidelines of the Commission with respect to pro forma
financial statements, has been properly compiled on the pro forma bases set
forth therein and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(l) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 7(k) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations; and Price Waterhouse LLP, whose report appears in
the Prospectus and who have delivered the initial letter referred to in
Section 7(l) hereof, were independent accountants as required by the
Securities Act and the Rules and Regulations during the periods covered by
the financial statements on which they reported contained in the
Prospectus.
(m) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them, in each case free and clear
of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and all real property
and buildings held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases, with such
exceptions as do
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not materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
businesses in similar industries with properties of a similar value.
(o) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses ("Intellectual Property") necessary
for the conduct of their respective businesses and have no reason to
believe that the conduct of their respective businesses will conflict with,
and have not received any notice of any claim of conflict with, any
Intellectual Property of others.
(p) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, might
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(q) There are no contracts or other documents which are required by
the Securities Act or by the Rules and Regulations to be described in the
Prospectus or filed as exhibits to the Registration Statement which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which might be expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries taken as a whole.
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(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries taken as a whole.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(w) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any
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material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (iii) is in
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed
to obtain any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to
the conduct of its business, where any such violation or failure, in the
case of this subclause (iii), might have a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole.
(y) Neither the Company nor any of its subsidiaries, nor any
director, officer, employee or, to the knowledge of the Company any agent
or other person associated with or acting on behalf of the Company or any
of its subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries in violation
of any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries taken
as a whole; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or
into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or
caused by the Company or any of its subsidiaries or with respect to which
the Company or any of its subsidiaries have knowledge, except for any such
spill, discharge, leak, emission, injection, escape, dumping or release
which would not have or would not be reasonably likely to have, singularly
or in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect on
the
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consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its subsidiaries taken
as a whole; and the terms "hazardous wastes," "toxic wastes," "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(aa) Neither the Company nor any subsidiary is an "investment company"
nor "a company controlled by an investment company" within the meaning of
such terms under the United States Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
(ab) The Company and its subsidiaries posses all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses as currently conducted, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a material adverse change in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(ac) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale of
the Shares.
(ad) The Company has complied and will comply with all of the
provisions of Florida H.B. 1771, codified as Section 517.075 of the Florida
Statutes, and all regulations promulgated thereunder relating to issuers
doing business in Cuba.
2. Purchase of the Stock by the International Managers. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell 1,200,000
shares of the Firm Stock to the several International Managers and each of the
International Managers, severally and not jointly, agrees to purchase the number
of shares of the Firm Stock set opposite that International Manager's name in
Schedule 1 hereto. The respective purchase obligations of the International
Managers with respect to the Firm Stock shall be rounded among the International
Managers to avoid fractional shares, as the Lead Managers may determine.
In addition, the Company grants to the International Managers an
option to purchase up to 180,000 shares of Option Stock. Such option is granted
solely for the purpose of covering over-allotments in the sale of Firm Stock and
is exercisable as provided in
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Section 5 hereof. Shares of Option Stock shall be purchased severally for the
account of the International Managers in proportion to the number of shares of
Firm Stock set opposite the name of such International Managers in Schedule 1
hereto. The respective purchase obligations of each International Manager with
respect to the Option Stock shall be adjusted by the Lead Managers so that no
International Manager shall be obligated to purchase Option Stock other than in
100 share amounts. The price of both the Firm Stock and any Option Stock shall
be $_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as such terms
are hereinafter defined), as the case may be, except upon payment for all the
Stock to be purchased on such Delivery Date as provided herein and in the U.S.
Underwriting Agreement.
3. Offering of Stock by the International Managers. Upon
authorization by the Lead Managers of the release of the Firm Stock, the several
International Managers propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus.
It is understood that _______ shares of the Firm Stock will initially
be reserved by the several International Managers for offer and sale upon the
terms and conditions set forth in the Prospectus and in accordance with the
rules and regulations of the National Association of Securities Dealers, Inc. to
employees and persons having business relationships with the Company and its
subsidiaries who have heretofore delivered to the Lead Managers offers or
indications of interest to purchase shares of Firm Stock in form satisfactory to
the Lead Managers, and that any allocation of such Firm Stock among such persons
will be made in accordance with timely directions received by the Lead Managers
from the Company; provided that under no circumstances will the Lead Managers or
any International Manager be liable to the Company or to any such person for any
action taken or omitted in good faith in connection with such offering to
employees and persons having business relationships with the Company and its
subsidiaries. It is further understood that any shares of such Firm Stock which
are not purchased by such persons will be offered by the International Managers
to the public upon the terms and conditions set forth in the Prospectus.
Each International Manager agrees that, except to the extent permitted
by the Agreement Between U.S. Underwriters and International Managers, it will
not offer or sell any of the Stock in the United States or Canada.
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the office of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York City time, on the
third full business day following the date of this Agreement (fourth, if the
pricing occurs after 4:30 P.M. (New York City time) on any given day) or at such
other date or place as shall be determined by
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agreement between the Lead Managers and the Company. This date and time are
sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Lead Managers for the account of each International Manager
against payment to or upon the order of the Company of the purchase price by
certified or official bank check or checks payable in immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each International Manager hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Lead Managers shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Lead Managers in New
York, New York, not later than 2:00 P.M., New York City time, on the business
day prior to the First Delivery Date.
At any time, or from time to time, on or before the thirtieth day
after the date of this Agreement, the option granted in Section 2 may be
exercised by written notice being given to the Company by the Lead Managers.
Such notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the Lead
Managers, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are sometimes
each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 4
(or at such other place as shall be determined by agreement between the Lead
Managers and the Company) at 10:00 A.M., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Company shall deliver or cause
to be delivered the certificates representing the Option Stock to the Lead
Managers for the account of each International Manager against payment to or
upon the order of the Company of the purchase price by certified or official
bank check or checks payable in immediately available funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each International Manager
hereunder. Upon delivery, the Option Stock shall be registered in such names
and in such denominations as the Lead Managers shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the
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Option Stock available for inspection by the Lead Managers in New York, New
York, not later than 2:00 P.M., New York City time, on the business day prior to
the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Lead Managers
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Lead Managers, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Lead Managers with copies
thereof; to advise the Lead Managers, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Lead Managers and to counsel
for the International Managers a signed copy of the Registration Statement
as originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Lead Managers such number of the
following documents as the Lead Managers shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
by law at any time after the Effective Time in connection with the offering
or sale of the Stock or any other securities relating thereto and if at
such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any
13
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Lead Managers and, upon their request, to
prepare and furnish without charge to each International Manager and to any
dealer in securities as many copies as the Lead Managers may from time to
time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the Lead
Managers, be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Lead Managers and counsel for the International Managers and
obtain the consent of the Lead Managers to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the Lead
Managers an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and
the Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For the period ending on the earlier of (i) five years following
the Effective Date or (ii) such date as the Company is no longer required
to file reports under the Exchange Act, to furnish to the Lead Managers
copies of all materials furnished by the Company to its shareholders and
all public reports and all reports and financial statements furnished by
the Company to the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the Lead
Managers may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Lead Managers may
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Stock; provided that in no
event shall the Company be required to qualify as a foreign corporation or
14
otherwise subject itself to taxation in any jurisdiction in which it is not
otherwise qualified or so subject;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, offer for sale, sell or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock (other than the Stock and shares
issued pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof or pursuant
to currently outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of Common Stock
(other than the grant of options pursuant to option plans existing on the
date hereof), without the prior written consent of Xxxxxx Brothers Inc.;
and to cause each officer and director of the Company to furnish to the
Lead Managers, prior to the First Delivery Date, a letter or letters, in
form and substance satisfactory to counsel for the International Managers,
pursuant to which each such person shall agree not to, directly or
indirectly, offer for sale, sell or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any shares
of Common Stock for a period of 180 days from the date of the Prospectus,
without the prior written consent of Xxxxxx Brothers Inc.;
(j) Prior to the Effective Date, to apply for the inclusion of the
Stock on the Nasdaq National Market System and to use its best efforts to
complete that listing, subject only to official notice of issuance and
evidence of satisfactory distribution, prior to the First Delivery Date;
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the International Managers and receive and
consider its comments thereon, and to deliver promptly to the
Representatives a signed copy of each report on Form SR filed by it with
the Commission; and
(l) To apply the net proceeds from the sale of the Stock being sold
by the Company substantially as set forth in the Prospectus.
6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as
15
provided in this Agreement; (d) the costs of producing and distributing this
Agreement, the Agreement between U.S. Underwriters and International Managers,
any Supplemental Agreement among U.S. Underwriters and any other related
documents in connection with the offering, purchase, sale and delivery of the
Stock; (e) the fees and expenses (including reasonable legal fees) incident to
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of sale of the Stock; (f) any applicable listing or other
fees; (g) the fees and expenses (including reasonable legal fees) of qualifying
the Stock under the securities laws of the several jurisdictions as provided in
Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the International Managers);
(h) the reasonable legal fees of counsel for the International Managers in
connection with the application for the inclusion of the Stock on Nasdaq
National Market System; (i) all costs and expenses of the International
Managers, including the fees and disbursements of counsel for the International
Managers, incident to the offer and sale of shares of the Stock by the
International Managers to employees and persons having business relationships
with the Company and its subsidiaries, as described in Section 3; and (j) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
6 and in Section 11, the International Managers shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the International Managers.
7. Conditions of International Managers' Obligations. The
respective obligations of the International Managers hereunder are subject to
the accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No International Manager or U.S. Underwriter have discovered and
disclosed to the Company on or prior to such Delivery Date that the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of
Shearman & Sterling, counsel for the International Managers, is material or
omits to state a fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
16
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the U.S. Underwriting
Agreement, the Stock, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the International Managers, and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Pepper, Xxxxxxxx & Xxxxxxx shall have furnished to the Lead
Managers its written opinion, as counsel to the Company, addressed to the
International Managers and the U.S. Underwriters and dated such Delivery
Date, in the form attached hereto as Exhibit A.
(e) Xxxxxxx & Berlin, Chartered shall have furnished to the Lead
Managers its written opinion, as special United States telecommunications
counsel for the Company, addressed to the International Managers and the
U.S. Underwriters and dated such Delivery Date, in the form attached hereto
as Exhibit B.
(f) Rakisons Solicitors shall have furnished to the Lead Managers its
written opinion, as British regulatory counsel for the Company, addressed
to the International Managers and the U.S. Underwriters and dated such
Delivery Date, in the form attached hereto as Exhibit C.
(g) Xxxxxxx & Company Solicitors shall have furnished to the Lead
Managers its written opinion, as Australian regulatory counsel for the
Company, addressed to the International Managers and the U.S. Underwriters
and dated such Delivery Date, in the form attached hereto as Exhibit D.
(h) Gallastegui Y Xxxxxx, S.C. shall have furnished to the Lead
Managers its written opinion, as Mexican regulatory counsel for the
Company, addressed to the International Managers and the U.S. Underwriters
and dated such Delivery Date, in the form attached hereto as Exhibit E.
(i) Xxxxx Xxxxxx Xxxxxxx shall have furnished to the Lead Managers
its written opinion, as Australian counsel for the Company, addressed to
the International Managers and the U.S. Underwriters and dated such
Delivery Date, in the form attached hereto as Exhibit F.
(j) The Lead Managers shall have received from Shearman & Sterling,
counsel for the International Managers, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the
17
Prospectus and other related matters as the Lead Managers may reasonably
require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to
pass upon such matters.
(k) At the time of execution of this Agreement, the Lead Managers
shall have received from Deloitte & Touche LLP a letter, in form and
substance satisfactory to the Lead Managers, addressed to the International
Managers and the U.S. Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof),
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(l) At the time of execution of this Agreement, the Lead Managers
shall have received from Price Waterhouse LLP a letter, in form and
substance satisfactory to the Lead Managers, addressed to the International
Managers and the U.S. Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof),
the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(m) With respect to the letter of Deloitte & Touche LLP referred to
in paragraph (k) of this Section 7 and delivered to the Lead Managers
concurrently with the execution of this Agreement (the "initial letter"),
the Company shall have furnished to the Lead Managers a letter (the "bring-
down letter") of such accountants, addressed to the International Managers
and the U.S. Underwriters and dated such Delivery Date (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified
18
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to the financial information and
other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial
letter.
(n) With respect to the letter of Price Waterhouse LLP referred to
in paragraph (l) of this Section 7 and delivered to the Lead Managers
concurrently with the execution of this Agreement (the "initial letter"),
the Company shall have furnished to the Lead Managers a letter (the "bring-
down letter") of such accountants, addressed to the International Managers
and the U.S. Underwriters and dated such Delivery Date (i) confirming that
they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation
S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(o) The Company shall have furnished to the Lead Managers a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company has complied with all its agreements contained herein; and
the conditions set forth in Sections 7(a) and 7(p) have been
fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.
(p) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business (x)
from fire, explosion, flood or other calamity,
19
whether or not covered by insurance, or (y) from any labor dispute or court
or governmental action, order or decree, in either case otherwise than as
set forth or contemplated in the Prospectus or (ii) since such date there
shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Lead Managers,
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner contemplated
in the Prospectus.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several International Managers,
impracticable or inadvisable to proceed with the public offering or
delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(r) The National Market System shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(s) The closing under the U.S. Underwriting Agreement shall have
occurred concurrently with the Closing hereunder on the First Delivery
Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the International Managers.
20
8. Indemnification and Contribution. (a) The Company and Primus
Telecommunications, Inc., a Delaware corporation, and Axicorp Pty., Ltd., a
company organized under the laws of Australia (collectively, the "Principal
Subsidiaries"), jointly and severally, shall indemnify and hold harmless each
International Manager, its officers and employees and each person, if any, who
controls any International Manager within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that International Manager, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (B) in any blue sky application or other
document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Stock under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any International Manager in connection with, or relating in
any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company and the Principal Subsidiaries shall not be liable
under this clause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such International Manager through its gross negligence
or willful misconduct), and shall reimburse each International Manager and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that International Manager, officer,
employee or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and the
Principal Subsidiaries shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such International Manager furnished to the Company through the Lead
Managers by or on behalf of any International Manager specifically for inclusion
therein. The foregoing indemnity agreement is in addition to any liability
which the Company or the Principal Subsidiaries may otherwise have to any
21
International Manager or to any officer, employee or controlling person of that
International Manager.
(b) Each International Manager, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such International Manager furnished to the Company through the Lead Managers by
or on behalf of that International Manager specifically for inclusion therein,
and shall reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any International Manager may otherwise have
to the Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and provided further that the failure
to notify the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any
22
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Lead Managers shall have the right to
employ counsel to represent jointly the Lead Managers and those other
International Managers and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the International Managers against the Company
or the Principal Subsidiaries under this Section 8 if, in the reasonable
judgment of the Lead Managers, it is advisable for the Lead Managers and those
International Managers, officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Company or the Principal
Subsidiaries. No indemnifying party shall (i) without the prior written consent
of the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Principal Subsidiaries on the one hand and the
International Managers on the other from the offering of the Stock or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Principal Subsidiaries on the one hand and the International Managers on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Principal Subsidiaries, on the one hand, and the International
Managers on the other with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the International Managers with
23
respect to the shares of the Stock purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the shares of the
Stock under this Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Principal Subsidiaries or the International Managers, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For purposes of
the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Principal Subsidiaries
and information supplied by the Company shall also be deemed to have been
supplied by the Principal Subsidiaries. The Company and the Principal
Subsidiaries and the International Managers agree that it would not be just and
equitable if contributions pursuant to this Section were to be determined by pro
rata allocation (even if the International Managers were treated as one entity
for such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 8(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no International Manager shall be required to
contribute any amount in excess of the amount by which the total price at which
the Stock underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such International Manager has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The International Managers' obligations to
contribute as provided in this Section 8(d) are several in proportion to their
respective underwriting obligations and not joint.
(e) The International Managers severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the International Managers set forth on the cover page of, the legend
concerning over-allotments on the inside front cover page of and the concession
and reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
International Managers furnished in writing to the Company by or on behalf of
the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
9. Defaulting International Managers. If, on either Delivery Date,
any International Manager defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting International Managers shall be
obligated to purchase the Stock which the defaulting International Manager
agreed but failed to purchase on such Delivery
24
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting International Manager in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting International Managers in
Schedule 1 hereto; provided, however, that the remaining non-defaulting
International Managers shall not be obligated to purchase any of the Stock on
such Delivery Date if the total number of shares of the Stock which the
defaulting International Manager or International Managers agreed but failed to
purchase on such date exceeds 9.09% of the total number of shares of the Stock
to be purchased on such Delivery Date, and any remaining non-defaulting
International Manager shall not be obligated to purchase more than 110% of the
number of shares of the Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded, the
remaining non-defaulting International Managers, or those other underwriters
satisfactory to the Lead Managers who so agree, shall have the right, but shall
not be obligated, to purchase, in such proportion as may be agreed upon among
them, all the Stock to be purchased on such Delivery Date. If the remaining
International Managers or other underwriters satisfactory to the Lead Managers
do not elect to purchase the shares which the defaulting International Manager
or International Managers agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the International Managers to purchase, and of the Company to sell, the Option
Stock) shall terminate without liability on the part of any non-defaulting
International Manager or the Company, except that the Company will continue to
be liable for the payment of expenses to the extent set forth in Sections 6 and
11. As used in this Agreement, the term "International Manager" includes, for
all purposes of this Agreement unless the context requires otherwise, any party
not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases Firm
Stock which a defaulting International Manager agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting International
Manager of any liability it may have to the Company for damages caused by its
default. If other underwriters are obligated or agree to purchase the Stock of
a defaulting or withdrawing International Manager, either the Lead Managers or
the Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the International Managers may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
10. Termination. The obligations of the International Managers
hereunder may be terminated by the Lead Managers by notice given to and received
by the Company prior to delivery of and payment for the Firm Stock if, prior to
that time, any of the events described in Section 7(p) or 7(q), shall have
occurred or if the International Managers shall decline to purchase the Stock
for any reason permitted under this Agreement.
11. Reimbursement of International Managers' Expenses. If the
Company shall fail to tender the Firm Stock for delivery to the International
Managers at the First
25
Delivery Date by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the International Managers' obligations hereunder required to
be fulfilled by the Company is not fulfilled, the Company will reimburse the
International Managers for all reasonable out-of-pocket expenses (including fees
and disbursements of counsel) incurred by the International Managers in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the Lead Managers. If
the International Managers shall have properly exercised their option under
Section 4 hereof to purchase the Option Stock, and if the Company shall fail to
tender the Option Stock for delivery to the International Managers at the Second
Delivery Date by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the International Managers' obligations hereunder required to
be fulfilled by the Company is not fulfilled, the Company will reimburse the
International Managers for 15% of the reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) incurred by the
International Managers in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company shall pay the full amount
thereof to the Lead Managers. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more International Managers, the
Company shall not be obligated to reimburse any defaulting International Manager
on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the International Managers, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers International
(Europe), Xxx Xxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, Attention: Syndicate
Department (Fax: 00-000-000-0000), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers International (Europe), Xxx Xxxxxxxxx,
Xxxxxx XX0X 0XX, Xxxxxxx; and
(b) if to the Company or to the Principal Subsidiaries, shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement, Attention: K. Xxxx
Xxxxx, Chairman and Chief Executive Officer (Fax: (000) 000-0000);
provided, however, that any notice to an International Manager pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission
to such International Manager at its address set forth in its acceptance telex
to the Lead Managers, which address will be supplied to any other party hereto
by the Lead Managers upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made
26
on behalf of the International Managers by Xxxxxx Brothers Inc. on behalf of the
Lead Managers.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the International Managers, the
Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any International Manager within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the International Managers contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 13, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Principal Subsidiaries and the
International Managers contained in this Agreement or made by or on behalf on
them, respectively, pursuant to this Agreement, shall survive the delivery of
and payment for the Stock and shall remain in full force and effect, regardless
of any investigation made by or on behalf of any of them or any person
controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
16. Governing Law. This Agreement shall be governed by the laws of
the State of New York.
17. Consent to Jurisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("Related Proceedings") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process,
27
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any lawsuit, action or other
proceeding brought in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Axicorp Pty., Ltd. hereby
irrevocably appoints CT Corporation System, which currently maintains a New York
City office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of
America, as its agent to receive service of process or other legal summons for
purposes of any such action or proceeding that may be instituted in any state or
federal court in the City and State of New York.
18. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
28
If the foregoing correctly sets forth the agreement between the
Company, the Principal Subsidiaries and the International Managers, please
indicate your acceptance in the space provided for that purpose below.
Very truly yours,
Primus Telecommunications Group,
Incorporated
By
------------------------------------
Title
------------------------
Primus Telecommunications, Incorporated
By
------------------------------------
Title
------------------------
Axicorp Pty., Ltd.
By
------------------------------------
Title
------------------------
Accepted:
Xxxxxx Brothers International (Europe)
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
For themselves and as Lead Managers
of the several International Managers named
in Schedule 1 hereto
By Xxxxxx Brothers International (Europe)
By
---------------------------------
Authorized Representative
SCHEDULE 1
Number of
Underwriters Shares
------------ ---------
Xxxxxx Brothers International (Europe) .....................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.........
Total.................................................... 1,200,000
=========
EXHIBIT A
, 1996
-------------------
XXXXXX BROTHERS INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
as Representatives of the Several Underwriters
named in Schedule I to the Underwriting Agreement
referred to below
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
as Lead Managers of the Several International Managers
named in Schedule I to the International Underwriting Agreement
referred to below
c/x Xxxxxx Brothers International (Europe)
Xxx Xxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Re: Primus Telecommunications Group, Incorporated
---------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Primus Telecommunications Group,
Incorporated, a Delaware corporation (the "Company"), in connection with the
execution and delivery by the Company of the Underwriting Agreement dated
_____________, 1996 (the "Underwriting Agreement") by and among the Company and
you, as representatives (the "Representatives") of the several U.S. Underwriters
listed on Schedule I attached thereto (the "U.S. Underwriters"), the
International Underwriting Agreement dated _____________, 1996 (the
"International Underwriting Agreement," and together with the U.S. Underwriting
Agreement, the "Agreements") by and among the Company and you, as Lead Managers
(the "Lead Managers") of the several International Managers listed on Schedule I
thereto (the "International Managers") and the filing by the Company with the
United States Securities and Exchange Commission pursuant to the Securities Act
of 1933, as amended (the "Securities Act"), of the Company's registration
statement on Form S-1 (No. 333-10875), as amended to date, relating to 6,000,000
shares (the "Firm Shares') of the Company's common stock, $.01 par value per
share (the "Common Stock"), and an additional 900,000 shares of Common Stock
which may be purchased by the Underwriters and the International Managers solely
to cover over-allotments (the "Option Shares"). This
A-2
opinion is delivered to you pursuant to Section 7(d) of the Agreements.
Capitalized terms used herein but not otherwise defined have the meanings
ascribed to them in the Agreements.
In connection with this opinion, we have examined the Agreements, the
Registration Statement and originals, or copies reproduced or certified to our
satisfaction, of such corporate records of the Company, Primus
Telecommunications, Inc. and Axicorp Pty., Ltd. (each a "Subsidiary" and
collectively, the "Subsidiaries") as we have deemed necessary to form the basis
for the opinions hereinafter expressed. We have also made such examination of
laws, of certificates of public officials, and of certificates of officers of
the Company and the Subsidiaries, as we have deemed necessary to enable us to
render this opinion. As to matters of fact relevant to the opinions herein
expressed, we have assumed the accuracy and completeness of, and have relied
solely upon, the representations and warranties of the Company contained in the
Agreements and in such certificates of officers of the Company and the
Subsidiaries, and of certificates of public officials.
We have assumed (i) the due execution and delivery, pursuant to due
authorization, of the Agreements by the parties thereto other than the Company,
(ii) the genuineness of the signatures of, and the authority of, persons signing
the Agreements on behalf of all parties other than the Company, (iii) the
genuineness of all signatures and the authenticity and completeness of all
records, certificates, instruments and documents submitted to us as originals,
and (iv) the conformity to authentic originals of all records, certificates,
instruments and documents submitted to us as certified, conformed, photostatic
or facsimile copies thereof.
This opinion is limited solely to matters governed by the laws of the State
of New York, the General Business Corporation Law of the State of Delaware and
the federal laws of the United States, without regard to conflict or choice of
law principles; provided, however, this opinion does not address federal, state,
-------- -------
or local statutes, laws, rules, regulations, or orders of any governmental
authority relating to governmental regulation of telecommunications companies.
In connection with the opinions set forth in paragraph (1) below, we have relied
exclusively upon a copy of the Company's and each Subsidiary's charter, as
certified by the Secretary of State of their respective jurisdictions of
incorporation, and certificates of good standing issued by various Secretaries
of State, copies of which are attached to this opinion.
Based upon the foregoing assumptions, and subject to the qualifications set
forth below, we are of the opinion that:
(i) The Company and each of its subsidiaries have been duly incorporated
and are validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or lease of property or the conduct of
A-3
their respective businesses requires such qualification and have all power and
authority necessary to own or hold their respective properties and conduct the
businesses in which they are engaged;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Firm Shares being delivered on the date hereof) have been duly
and validly authorized and issued, are fully paid and non-assessable and conform
to the description thereof contained in the Prospectus; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly and
validly authorized and issued and are fully paid, non-assessable and (except for
directors' qualifying shares) are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(iv) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and all real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
(v) To our knowledge and other than as set forth in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or assets of the Company or
any of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, might have a material adverse effect on the
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of ____ p.m. on __________________ ____, 1996, the Prospectus
was filed with the Commission pursuant to subparagraph ____ of Rule 424(b) of
the Rules and Regulations on _____________ ___, 1996 and no stop order
suspending the effectiveness of the Registration Statement has been issued and,
to the knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
A-4
(vii) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date (other than the financial statements and related schedules therein, as to
which we express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Registration Statement and
Prospectus under the captions "Certain Transactions," "Management - Employment
Agreements - Option Plans," etc., "Shares Eligible for Future Sale," [other
Sections], insofar as they describe statutes, regulations, legal or governmental
proceedings, contracts or other documents referred to therein are accurate and
fairly summarize the information called for with respect to such documents and
matters and, insofar as such statements constitute matters of law or legal
conclusions, have been reviewed by such counsel and fairly present the
information disclosed therein in all material respects;
(ix) To the best of our knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to the
Registration Statement;
(x) Each of the Agreements has been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the Firm Shares being delivered on the
date hereof by the Company and the compliance by the Company with all of the
provisions of each of the Agreements will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets; and, except for the
registration of the Firm Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws in connection with
the purchase and distribution of the Firm Shares by the Underwriters, no
consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby;
A-5
(xii) To our knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
(other than rights which have been duly waived) to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act; and
(xiii) There are no restrictions (legal, contractual or otherwise) on
the ability of the Company and its subsidiaries to declare and pay any dividends
or make any payment or transfer of property or assets to its stockholders other
than those described in the Prospectus and such restrictions as would not have a
material adverse effect on the prospects, condition, financial or otherwise, or
in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole; and such descriptions, if any, fairly summarize such
restrictions.
The opinions expressed above are subject to the following additional
qualification:
(a) We have assumed that the parties to the Agreements, other than
the Company, have complied and will continue to comply with all requirements of
good faith, fair dealing and conscionability.
In addition, we hereby advise you that we have participated in
conferences with officers and other representatives of the Company, the
Representatives and Lead Managers, U.S. Underwriters' and International
Managers' Counsel and the independent certified public accountants of the
Company, at which such conferences the contents of the Registration Statement
and Prospectus and related matters were discussed, and although we have not
undertaken to determine independently, and we do not assume any responsibility
for, the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, based upon those conferences and
reviews and upon our participation in the preparation of the Registration
Statement and Prospectus, no facts have come to our attention which cause us to
believe that, (i) at the time the Registration Statement became effective and at
all times subsequent thereto up to and on the Closing Date, the Registration
Statement and any amendment or supplement thereto (other than the financial
statements including supporting schedules and the statements contained under
"Business - Government Regulation" and "Risk Factors - Potential Adverse Effect
of Regulation," as to which this statement does not apply) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) as of the date hereof, or the date of the Prospectus, the Prospectus and
any amendment or supplement thereto (except as aforesaid), contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
A-6
This opinion is rendered only to the addressees set forth above and is solely
for the benefit of such addressees and may not be quoted to or relied upon by
any other person or entity without the express written consent of a partner of
this firm. In addition, Shearman & Sterling may rely upon this opinion in
connection with the delivery of its opinion to the addressees in connection with
the Agreement.
Very truly yours,
PEPPER, XXXXXXXX & XXXXXXX
By
-------------------------------
A Partner
EXHIBIT B
XXXXXX BROTHERS INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
as Representatives of the Several Underwriters
named in Schedule I to the Underwriting Agreement
referred to below
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
as Lead Managers of the Several International Managers
named in Schedule I to the International Underwriting Agreement
referred to below
c/x Xxxxxx Brothers International (Europe)
Xxx Xxxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
October ___, 1996
Ladies and Gentlemen:
We have acted as special United States telecommunications counsel to
Primus Telecommunications Group, Incorporated, a Delaware corporation (the
"Company"), in connection with the execution and delivery by the Company of the
Underwriting Agreement dated _____________, 1996 (the "Underwriting Agreement")
by and among the Company and you, as representatives (the "Representatives") of
the several U.S. Underwriters listed on Schedule I attached thereto (the "U.S.
Underwriters"), the International Underwriting Agreement dated _____________,
1996 (the "International Underwriting Agreement," and together with the U.S.
Underwriting Agreement, the "Agreements") by and among the Company and you, as
Lead Managers (the "Lead Managers") of the several International Managers listed
on Schedule I thereto (the "International Managers") and the filing by the
Company with the United States Securities and Exchange Commission pursuant to
the Securities Act of 1933, as amended (the "Securities Act"), of the Company's
registration statement on Form S-1 (No. 333-10875), as amended to date, relating
to 6,000,000 shares (the "Firm Shares') of the Company's common stock, $.01 par
value per share (the "Common Stock"), and an additional 900,000 shares of Common
Stock which may be purchased by the Underwriters and the International Managers
solely to cover over-allotments (the "Option Shares"). This opinion is
delivered to you pursuant to Section 7(e) of the Agreements. Capitalized terms
used herein but not otherwise defined have the meanings ascribed to them in the
Agreements.
B-2
In connection with this opinion, we have examined the Agreements, the
Registration Statement and originals, or copies reproduced or certified to our
satisfaction, of such corporate records of the Company [and Primus
Telecommunications, Inc.] (a "Subsidiary") as we have deemed necessary to form
the basis for the opinions hereinafter expressed. We have also made such
examination of laws, of certificates of public officials, and of certificates of
officers of the Company and the Subsidiaries, as we have deemed necessary to
enable us to render this opinion. As to matters of fact relevant to the
opinions herein expressed, we have assumed the accuracy and completeness of, and
have relied solely upon, the representations and warranties of the Company
contained in the Agreements and in such certificates of officers of the Company
and the Subsidiaries, and of certificates of public officials.
We have assumed (i) the due execution and delivery, pursuant to due
authorization, of the Agreements by the parties thereto other than the Company,
(ii) the genuineness of the signatures of, and the authority of, persons signing
the Agreements on behalf of all parties other than the Company, (iii) the
genuineness of all signatures and the authenticity and completeness of all
records, certificates, instruments and documents submitted to us as originals,
and (iv) the conformity to authentic originals of all records, certificates,
instruments and documents submitted to us as certified, conformed, photostatic
or facsimile copies thereof.
Based upon the foregoing assumptions, and subject to the
qualifications set forth below, we are of the opinion that:
(i) (A) The execution and delivery of the Underwriting Agreement by
the Company and the issue and sale of the shares contemplated thereby do not
violate (1) the Federal Communications Act of 1934, as amended (the
"Communications Act"), (2) any rules or regulations of the Federal
Communications Commission ("FCC") applicable to the Company, (3) any state
telecommunications law, rules or regulations ("State Law") applicable to the
Company, and (4) to the best of such counsel's knowledge, any decree from any
court, and (B) no authorization of or filing with the FCC or any state authority
overseeing telecommunications matters ("State Authority"), is necessary for the
execution and delivery of the Underwriting Agreement by the Company and the
issue and sale of the shares contemplated thereby in accordance with the terms
thereof;
(ii) The Company and certain of its subsidiaries (named on Schedule A
hereto) are nondominant carriers authorized by the FCC to provide interstate
interexchangeable telecommunications services. The Company and certain of its
subsidiaries (named on Schedule B hereto) have been granted Section 214
authority by the FCC to provide international message telecommunications
services through the resale of international switched voice and private line
services and each of the Company and such subsidiaries has on file with the FCC
tariffs applicable to its domestic interstate and international services. No
further FCC authority is
