EXHIBIT 10.23
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REGISTRATION RIGHTS AGREEMENT
Dated as of May 19, 1998
PRIMUS TELECOMMUNICATIONS GROUP, INC.,
PRIMUS TELECOMMUNICATIONS INCORPORATED,
PRIMUS TELECOMMUNICATIONS (AUSTRALIA) PTY. LTD.
and
▇▇▇▇▇▇ BROTHERS INC.
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TABLE OF CONTENTS
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Page
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1. Definitions.......................................................................................... 1
2. Securities Subject to This Agreement................................................................. 3
3. Registered Exchange Offer............................................................................ 3
4. Shelf Registration................................................................................... 5
5. Liquidated Damages................................................................................... 7
6. Registration Procedures.............................................................................. 8
7. Participation of Broker-Dealers in Exchange Offer.................................................... 17
8. Registration Expenses................................................................................ 18
9. Indemnification and Contribution..................................................................... 19
10. Rule 144A............................................................................................ 23
11. Participation in Underwritten Registrations.......................................................... 24
12. Selection of Underwriters............................................................................ 24
13. Miscellaneous........................................................................................ 24
14. Additional Representations of Primus Telecommunications, Incorporated
and Primus Telecommunications Pty. Ltd............................................................... 28
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 19, 1998 between Primus Telecommunications Group, Inc., a
Delaware corporation (the "Company"), Primus Telecommunications Incorporated, a
Delaware corporation, Primus Telecommunications (Australia) Pty. Ltd., an
Australian corporation, and ▇▇▇▇▇▇ Brothers Inc., for itself and as
Representative of the other Initial Purchasers named in Schedule I to the
Purchase Agreement (defined below), (collectively with the Representative, the
"Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of May 14, 1998, among the Company and the Initial
Purchasers (the "Purchase Agreement"), which provides for the sale by the
Company to the Initial Purchasers of $150,000,000 aggregate principal amount of
the Company's 9 7/8% Senior Notes due 2008 (the "Notes"), which Notes shall be
senior obligations of the Company and will rank pari passu in right of payment
with all other existing and future unsecured and unsubordinated obligations of
the Company, including trade payables, and will be effectively senior in right
of payment to all existing and future obligations of the Company expressly
subordinated in right of payment to the Notes. Capitalized terms used but not
specifically defined herein have the respective meanings ascribed thereto in the
Purchase Agreement. As an inducement to the Initial Purchasers to enter into
the Purchase Agreement and in satisfaction of a condition to the Initial
Purchasers' obligations thereunder, the Company agrees with the Initial
Purchasers, and its direct and indirect transferees, for the benefit of the
holders of the Notes (including the Initial Purchasers) (collectively, the
"Holders"), as follows:
1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the Exchange
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Act.
Closing Date: The date on which the Notes were sold to the Initial
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Purchasers.
Commission: The Securities and Exchange Commission.
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Damages Payment Date: With respect to the Notes, each Interest
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Payment Date (as defined in the Indenture) until the earlier of (i) the
date on which Liquidated Damages no longer are payable or (ii) maturity of
the Notes.
Effectiveness Target Date: As defined in Section 5 hereof.
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Exchange Act: The Securities Exchange Act of 1934, as amended.
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Exchange Notes: The Notes to be issued pursuant to the Indenture in
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the Exchange Offer.
Exchange Offer: The registration by the Company under the Securities
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Act of the Exchange Notes pursuant to a Registration Statement pursuant to
which the Company
offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities
held by such Holders for Exchange Notes in an aggregate principal amount
equal to the aggregate principal amount of the Transfer Restricted
Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
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relating to the Exchange Offer, including the Prospectus which forms a part
thereof.
Exempt Resales: The transactions in which the Initial Purchasers
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propose to sell the Notes to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Securities Act, and to certain
non-U.S. persons in offshore transactions meeting the requirements of Rule
903 of Regulation S under the Securities Act.
Holders: As defined in the second paragraph of this Agreement.
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Indenture: The Indenture, dated as of the date hereof, between the
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Company and First Union National Bank, as trustee (the "Trustee"), pursuant
to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Liquidated Damages: As defined in Section 5(a) hereof.
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NASD: National Association of Securities Dealers, Inc.
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Person: An individual, partnership, corporation, limited liability
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company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement,
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including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement and by all other amendments and
supplements thereto, including post-effective amendments, and all exhibits
thereto and all material incorporated by reference into such Prospectus.
Registration Default: As defined in Section 5 hereof.
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Registration Statement: Any registration statement of the Company
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relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, which is filed pursuant to
the provisions of this Agreement, in either case, including the Prospectus
included therein, all amendments and supplements thereto (including post-
effective amendments) and all exhibits and material incorporated by
reference therein.
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Related Transaction Documents: The Purchase Agreement and the
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Indenture, together with all exhibits and schedules thereto.
Securities Act: The Securities Act of 1933, as amended.
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Shelf Filing Deadline: As defined in Section 4 hereof.
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Shelf Registration Statement: As defined in Section 4 hereof.
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TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-
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77bbbb), as amended.
Transfer Restricted Securities: Each Note, until the earliest to
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occur of (a) the date on which such Note has been exchanged by a person
other than a Broker-Dealer for Exchange Notes in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of such
Note for one or more Exchange Notes, the date on which such Exchange Notes
are sold to a purchaser who receives from such Broker-Dealer on or prior to
the date of such sale a copy of the prospectus contained in the Exchange
Offer Registration Statement, (c) the date on which such Note has been
effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (d) the date on which
such Note is eligible to be distributed to the public pursuant to Rule 144
(k) (or any similar provision then in force) under the Securities Act.
Underwritten Registration or Underwritten Offering: A registration in
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which securities of the Company are sold to an underwriter for reoffering
to the public; provided, however, that the Company shall be obligated to
undertake no more than two such Underwritten Registrations or Underwritten
Offerings in the aggregate.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to the
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benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
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be a holder of Transfer Restricted Securities whenever such Person owns Transfer
Restricted Securities.
3. Registered Exchange Offer.
(a) Exchange Offer Registration Statement. Unless the Exchange Offer
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shall not be permissible under applicable law or Commission policy (after the
procedures set forth in Section 6(a) below have been complied with) or one of
the events set forth in Section 4(a)(ii) has occurred, the Company shall (i)
cause to be filed with the Commission promptly after the
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Closing Date, but in no event later than 60 days after the Closing Date, a
Registration Statement under the Securities Act relating to the Exchange Notes
and the Exchange Offer, (ii) use its reasonable best efforts to cause such
Registration Statement to become effective no later than 120 days after the
Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Registration Statement as may be necessary in order to cause
such Registration Statement to become effective, (B) if applicable, file a post-
effective amendment to such Registration Statement pursuant to Rule 430A under
the Securities Act and (C) cause all necessary filings in connection with the
registration and qualification of the Exchange Notes to be made under the "blue
sky" laws of such jurisdictions as are necessary to permit consummation of the
Exchange Offer, (iv) use its reasonable best efforts to cause the Exchange Offer
to be consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30 days
thereafter and (v) deliver the Exchange Notes in the same aggregate principal
amount as the aggregate principal amount of Transfer Restricted Securities that
were validly tendered by Holders thereof pursuant to the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Exchange Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Exchange Notes held by Broker-Dealers as contemplated
by Section 3(c) below. The time periods referred to in clauses (i), (ii) and
(iv) of this Section 3(a) shall not include any period during which the Company
is pursuing a Commission ruling pursuant to Section 6(a)(i) below.
(b) Consummation of the Exchange Offer. The Company shall use its
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reasonable best efforts to cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply in all material respects with all applicable
federal and state securities laws. No securities other than the Exchange Notes
shall be included in the Exchange Offer Registration Statement. The Exchange
Offer shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the
Commission. The Company shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right, subject to applicable law and at its own
expense, to contact such Holders and otherwise facilitate the tender of Transfer
Restricted Securities in the Exchange Offer.
(c) "Plan of Distribution" Section of the Prospectus. The Company
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shall indicate in a "Plan of Distribution" section contained in the Prospectus
contained in the Exchange Offer Registration Statement that any Broker-Dealer
who holds Notes that are Transfer Restricted Securities and that were acquired
for its own account as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company), may exchange such Notes pursuant to the Exchange Offer; provided,
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the
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Securities Act in connection with any resales of the Exchange Notes received by
such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Exchange Notes held by any
such Broker-Dealer except to the extent required by the Commission.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary (i) to
ensure that it is available for resales of Exchange Notes acquired by Broker-
Dealers for their own accounts as a result of market-making activities or other
trading activities, and (ii) to ensure that it conforms with the requirements of
this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time in each case, for a period of 180
days from the date on which the Exchange Offer Registration Statement is
declared effective.
The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon their reasonable request at any
time during such 180-day period in order to facilitate such resales.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not permitted to file
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the Exchange Offer Registration Statement or to consummate the Exchange Offer
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a) below have been complied
with), (ii) any Holder of Transfer Restricted Securities that is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act) shall
notify the Company at least 20 business days prior to the consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not appropriate or available for
such resales by such Holder, or (C) that such Holder is a Broker-Dealer and
holds Notes acquired directly from the Company or one of its affiliates, (iii)
the Exchange Offer is not for any other reason consummated by October 16, 1998
or (iv) the Exchange Offer has been completed and in the opinion of counsel for
the Initial Purchasers a Registration Statement must be filed and a Prospectus
must be delivered by the Initial Purchasers in connection with any offering or
sale of Transfer Restricted Securities, then the Company shall in lieu of or, in
the event of (ii) and (iv) above, in addition to effecting the registration of
the Exchange Notes pursuant to the Exchange Offer Registration Statement, use
its reasonable best efforts to:
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(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Securities Act which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement"), within 60 days of the earliest to occur of (1) the date on
which the Company determines that it is not required to file the Exchange
Offer Registration Statement, (2) the date on which the Company receives
notice from a Holder of Transfer Restricted Securities as contemplated by
clause (ii) above, (3) October 16, 1998 or (4) the receipt by the Company
of the opinion of counsel contemplated by clause (iv) above (the 60th day
following the earliest to occur of (1) through (4) being hereinafter
referred to as the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities
for which the Holders of such Transfer Restricted Securities shall have
provided the information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective
by the Commission on or before the 120th day after the Shelf Filing
Deadline.
The Company shall use its reasonable best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary (i) to ensure that it is available for resales of Notes by the Holders
of Transfer Restricted Securities entitled to the benefit of this Section 4(a),
and (ii) to ensure that such Shelf Registration Statement conforms and continues
to conform with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission, as announced from time to
time, in each case, for a period ending on the second anniversary of the Closing
Date.
(b) Provision by Holders of Certain Information in Connection with
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the Shelf Registration Statement. No Holder of Transfer Restricted Securities
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may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 10 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such reasonably requested information within
the time period prescribed in this Section 4(b). Each Holder as to which any
Shelf Registration Statement is being effected agrees to notify the Company
promptly if any of the information previously furnished is misleading or
inaccurate in any material respect and to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading or inaccurate.
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(c) Declaring Effective the Exchange Offer Registration Statement. An
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Exchange Offer Registration Statement pursuant to Section 3(a) hereof or a Shelf
Registration Statement pursuant to Section 4(a) hereof will not be deemed to
have become effective unless it has been declared effective by the Commission;
provided, however, that if, after it has been declared effective, the offering
of Transfer Restricted Securities pursuant to a Shelf Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the Commission or any other governmental agency or court, such Registration
Statement will be deemed not to have become effective during the period of such
interference until the offering of Transfer Restricted Securities pursuant to
such Registration Statement may legally resume.
(d) Failure of the Company to Comply with its Obligations. Without
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limiting the remedies available to the Initial Purchasers and the Holders, the
Company acknowledges that any failure by the Company to comply with its
obligations under Section 3(a) and Section 4(a) hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Section 3(a) and Section
4(a) hereof.
5. Liquidated Damages.
(a) Accrual and Amount of Liquidated Damages. If (i) any of the
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Registration Statements required by this Agreement is not filed with the
Commission on or prior to the date specified for such filing in this Agreement,
(ii) any of such Registration Statements has not been declared effective by the
Commission on or prior to the date specified for such effectiveness as set forth
in Section 3(a)(ii) and 4(a)(y) of this Agreement (the "Effectiveness Target
Date"), (iii) the Exchange Offer has not been consummated within 30 days after
the Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within five business
days by a post-effective amendment to such Registration Statement that cures
such failure and that is itself declared effective within such five business day
period (each such event referred to in clauses (i) through (iv), a "Registration
Default"), additional cash interest ("Liquidated Damages") shall accrue to each
Holder of the Notes commencing upon the occurrence of such Registration Default
in an amount equal to .50% per annum of the principal amount of Notes held by
such Holder. The amount of Liquidated Damages will increase by an additional
.50% per annum of the principal amount of Notes with respect to each subsequent
90-day period (or portion thereof) until all Registration Defaults have been
cured, up to a maximum rate of Liquidated Damages of 1.50% per annum of the
principal amount of Notes. All accrued Liquidated Damages shall be paid to
Holders by the Company in the same manner as interest is paid pursuant to the
Indenture. Immediately upon the cure of all Registration Defaults relating to
any particular Transfer Restricted Securities, the accrual of Liquidated Damages
with respect to such Transfer Restricted Securities will cease.
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All obligations of the Company set forth in the preceding paragraph
that have accrued and are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
(b) Notification of the Trustee. The Company shall notify the Trustee
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promptly after each and every date on which an event occurs in respect of which
Liquidated Damages are required to be paid (an "Event Date"). Liquidated
Damages shall be paid by depositing Liquidated Damages with the Trustee, in
trust, for the benefit of the Holders of the Notes, on or before the applicable
Interest Payment Date (whether or not any payment other than Liquidated Damages
is payable on such Notes), in immediately available funds in sums sufficient to
pay the Liquidated Damages then due to such Holders. Each obligation to pay
Liquidated Damages shall be deemed to accrue from the applicable date of the
occurrence of the Registration Default.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the
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Exchange Offer, the Company shall comply with all of the provisions of Section
6(c) below and shall use its reasonable best efforts to effect such exchange to
permit the sale of Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof. In addition, the Company
(with respect to (i) and (iii) of this Section 6(a)) and each Holder of Transfer
Restricted Securities (with respect to (ii) of this Section 6(a)) shall comply
with the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable law,
the Company hereby agrees to seek a no-action letter or other favorable
decision from the Commission allowing the Company to consummate an Exchange
Offer for such Notes. The Company hereby agrees to pursue the issuance of
such a decision to the Commission staff level but shall not be required to
take commercially unreasonable action to effect a change of Commission
policy. The Company hereby agrees, however, to (A) participate in
telephonic conferences with the staff of the Commission, (B) deliver to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) use reasonable best
efforts pursue a resolution (which need not be favorable) by the Commission
staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall (x) furnish, upon the request of the Company, prior to the
consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is
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not an affiliate of the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the Exchange Notes to be issued
in the Exchange Offer and (C) it is acquiring the Exchange Notes in its
ordinary course of business and (y) otherwise cooperate in the Company's
preparations for the Exchange Offer. Each Holder hereby acknowledges and
agrees that any Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated in
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991) and Exxon Capital
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Holdings Corporation (available May 13, 1988), as interpreted in the
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Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (including ▇▇▇▇▇ & ▇▇▇▇ LLP (available February 7, 1997),
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and any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction and
that such a secondary resale transaction should be covered by an effective
registration statement containing the selling security holder information
required by Item 507 or 508, as applicable, of Regulation S-K if the
resales are of Exchange Notes obtained by such Holder in exchange for Notes
acquired by such Holder directly from the Company.
(iii) Prior to the effectiveness of the Exchange Offer Registration
Statement, to the extent required by the Commission, the Company shall
provide a supplemental letter to the Commission (A) stating that the
Company is registering the Exchange Offer in reliance on the position of
the Commission enunciated in Exxon Capital Holdings Corporation (available
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May 13, 1988), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991), ▇▇▇▇▇
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& Wood LLP (available February 7, 1997) and, if applicable, any no-action
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letter obtained pursuant to clause (i) above and (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Exchange Notes to be
received in the Exchange Offer and that to the best of the Company's
information and belief, each Holder (other than an Initial Purchaser)
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Exchange Notes
received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
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Registration Statement, the Company shall comply with all the provisions of
Section 6(c) below and shall use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto the Company shall as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
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(c) General Provisions. In connection with any Registration
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Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers), the Company shall:
(i) use its reasonable best efforts to (x) keep such Registration
Statement continuously effective and (y) provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use
its reasonable best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act and to comply
fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(iii) in the case of a Shelf Registration Statement, advise the
underwriter(s), if any, and selling Holders promptly and, if requested by
any underwriter(s) or selling Holders to confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission or any state securities
authority for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Securities Act or
of the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) if, between the
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effective date of a Registration Statement and the closing of any sale of
Transfer Restricted Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all material respects or if
the Company receives any notification with respect to the suspension of the
qualification of the Transfer Restricted Securities for sale in any
jurisdiction or the initiation of any proceeding for such purpose, (E) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading and (F) of any
determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, the Company shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time and shall provide prompt notice to each of the selling or exchanging
Holders of the withdrawal of any such order;
(iv) in the case of a Shelf Registration Statement, furnish to each of
the selling or exchanging Holders and each of the underwriter(s), if any,
before filing with the Commission, copies of any Registration Statement or
any Prospectus included therein or any amendments or supplements to any
such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review of such Holders
and underwriter(s), if any, for a period of two business days, and the
Company will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which selling
Holders of a majority in aggregate principal amount of Transfer Restricted
Securities covered by such Registration Statement or the underwriter(s), if
any, shall reasonably object within two business days after the receipt
thereof. A selling Holder or underwriter, if any, shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;
(v) in the case of a Shelf Registration Statement, promptly prior to
the filing of any document that is to be incorporated by reference into a
Registration Statement or Prospectus, provide copies of such document to
the selling Holders and to the underwriter(s), if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information
-11-
in such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) in the case of a Shelf Registration Statement, subject to
execution of a confidentiality agreement reasonably acceptable to the
Company, make available at reasonable times for inspection by a
representative of the selling Holders, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant retained by such selling Holders or any of the underwriter(s),
all financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors,
managers and employees to supply all information reasonably requested by
any such Holder, underwriter, attorney or accountant in connection with
such Registration Statement subsequent to the filing thereof and prior to
its effectiveness;
(vii) in the case of a Shelf Registration Statement, if requested by
any selling Holders or the underwriter(s), if any, promptly incorporate in
any Registration Statement or Prospectus, pursuant to a supplement or post-
effective amendment if necessary, such information as such selling Holders
and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;
(viii) in the case of a Shelf Registration Statement, furnish to each
selling Holder and each of the underwriter(s), if any, without charge, at
least one conformed copy of the Registration Statement, as first filed with
the Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) in the case of a Shelf Registration Statement, deliver to each
selling Holder and each of the underwriter(s), if any, without charge, as
many conformed copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company hereby consents to the use of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
-12-
(x) in the case of a Shelf Registration Statement, enter into such
agreements (including an underwriting agreement), and make such
representations and warranties, and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all to such extent as may be reasonably
requested by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement; and in connection with an Underwritten
Registration, the Company shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may request
and as are customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of the effectiveness of the
Shelf Registration Statement:
(1) a certificate, dated the date of the effectiveness of
the Shelf Registration Statement, signed by (y) the Chairman of
the Board, its President or a Vice President and (z) the Chief
Financial Officer of the Company, confirming, as of the date
thereof, such customary matters as such parties may reasonably
request;
(2) an opinion, dated the date of the effectiveness of the
Shelf Registration Statement, of counsel for the Company,
covering such customary matters as such parties may reasonably
request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company, representatives of the
independent public accountants for the Company, the Initial
Purchasers' representatives and the Initial Purchasers' counsel
in connection with the preparation of such Registration Statement
and the related Prospectus and have considered the matters
required to be stated therein and the statements contained
therein, although such counsel has not independently verified the
accuracy, completeness or fairness of such statements; and that
such counsel advises that, on the basis of the foregoing (relying
as to materiality to a large extent upon facts provided to such
counsel by officers and other representatives of the Company and
without independent investigation or verification), no facts came
to such counsel's attention that caused such counsel to believe
that the applicable Registration Statement, at the time such
Registration Statement or any post-effective amendment thereto
became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus included in such Registration
Statement as of its date, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in
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light of the circumstances under which they were made, not
misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for,
and has not independently verified, the accuracy, completeness or
fairness of the financial statements, notes and schedules and
other statistical and financial data included in any Registration
Statement contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the date of the
effectiveness of the Shelf Registration Statement from the
Company's independent accountants and from the independent
accountants of other Persons whose financial statements are
included in the Shelf Registration Statement, in the customary
form and covering matters of the type customarily covered in
comfort letters by underwriters in connection with primary
underwritten offerings.
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 9 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (x), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Initial Purchasers and the underwriter(s), if
any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing delivered to such Persons;
(xi) in the case of a Shelf Registration Statement, prior to any
public offering of Transfer Restricted Securities, cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel
in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s), if any, may
reasonably request and do any and all other acts or things as may be
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation, other than as to matters and transactions relating to the
Registration Statement in any jurisdiction where it is not now so subject;
-14-
(xii) in the case of an Exchange Offer Registration Statement, shall
issue, upon the request of any Holder of Notes covered by the Exchange
Offer Registration Statement, Exchange Notes in the same amount as the
Notes surrendered to the Company by such Holder in exchange therefor or
being sold by such Holder; such Exchange Notes to be registered in the name
of such Holder or in the name of the purchaser(s) of such Exchange Notes,
as the case may be; in return, the Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xiii) in the case of a Shelf Registration Statement, cooperate with
the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends;
and enable such Transfer Restricted Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in such
names as the selling Holders or the underwriter(s), if any, may reasonably
request at least two business days prior to any sale of Transfer Restricted
Securities made by such underwriter(s);
(xiv) use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xi)
above;
(xv) if any fact or event contemplated by clause (c)(iii)(E) above
shall exist or have occurred, prepare and file with the Commission a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, such Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and provide
certificates for the Transfer Restricted Securities;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities; provided,
-15-
however, that the Company shall not be required to register or qualify as a
foreign corporation or as a dealer in securities in any jurisdiction where
it is not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation, other than as to matters
and transactions relating to the Registration Statement in any jurisdiction
where it is not now so subject;
(xviii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to the Holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in a firm
or reasonable best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use its reasonable best efforts to cause the
Trustee to execute all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xx) provide promptly to each Holder upon reasonable request each
document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(E) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof,
or until such Holder is advised in writing (the "Advice") by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice.
In the event that the Company shall give any such notice, the time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(E) hereof to and including the date when each selling Holder
-16-
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or
shall have received the Advice.
7. Participation of Broker-Dealers in Exchange Offer.
(a) Participating Broker-Dealer May Be Deemed an "Underwriter". The
----------------------------------------------------------
Commission has taken the position that any Broker-Dealer that receives Exchange
Notes for its own account in the Exchange Offer in exchange for Notes that were
acquired by such Broker-Dealer as a result of market-making or other trading
activities (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes.
The Company understands that it is the Commission's position that if
the Prospectus contained in the Exchange Offer Registration Statement includes a
"Plan of Distribution" containing a statement to the above effect and the means
by which Participating Broker-Dealers may resell the Exchange Notes, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Notes owned by them, such Prospectus may be delivered by Participating Broker-
Dealers to satisfy their prospectus delivery obligation under the Securities Act
in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the Securities Act.
(b) Provisions Regarding Shelf Registration Statement to Apply to
-------------------------------------------------------------
Exchange Offer Registration. In light of the above, notwithstanding the other
---------------------------
provisions of this Agreement, the Company agrees that the provisions of this
Agreement as they relate to a Shelf Registration Statement shall also apply to
an Exchange Offer Registration to the extent, and with such reasonable
modifications thereto, as may be reasonably requested by the Initial Purchasers
or by one or more Participating Broker-Dealers, in each case as provided in
clause (ii) below, in order to expedite or facilitate the disposition of any
Exchange Notes by Participating Broker-Dealers consistent with the positions of
the Commission recited in Section 7(a) above; provided, however, that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Exchange Offer Registration Statement, as would
otherwise be contemplated by Section 6(c)(xv), for a period exceeding 180
days after the last date of acceptance for exchange (as such period may be
extended pursuant to the last paragraph of Section 6 of this Agreement) and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 7; and
(ii) the application of the Shelf Registration Statement procedures
set forth in Section 4 of this Agreement to an Exchange Offer Registration,
to the extent not required by the positions of the Commission or the
Securities Act and the rules and regulations
-17-
thereunder, will be in conformity with the reasonable request to the
Company by the Initial Purchasers or with the reasonable request in writing
to the Company by one or more broker-dealers who certify to the Initial
Purchasers and the Company in writing that they anticipate that they will
be Participating Broker-Dealers;
provided further that, in connection with such application of the Shelf
Registration Statement procedures set forth in Section 4 to an Exchange Offer
Registration, the Company shall be obligated (x) to deal only with one entity
representing the Participating Broker-Dealers, which shall be the Representative
unless it elects not to act as such representative, (y) to pay the fees and
expenses of only one counsel representing the Participating Broker-Dealers,
which shall be counsel selected by the Representative and reasonably acceptable
to the Company (unless such counsel elects not to so act), and (z) to cause to
be delivered only one, if any, "cold comfort" letter with respect to the
Prospectus in the form existing on the last date of acceptance for exchange and
with respect to each subsequent amendment or supplement, if any, effected during
the period specified in clause (i) above.
(c) Liability of the Initial Purchasers. The Initial Purchasers
-----------------------------------
shall have no liability to the Company or any Holder with respect to any request
that they may make pursuant to Section 7(b) above.
8. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including filings
made by any Initial Purchaser or Holder with the NASD (and, if applicable, the
reasonable fees and expenses of any "qualified independent underwriter") and its
counsel that may be required by the rules and regulations of the NASD); (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), and associated messenger and delivery services and
telecommunications usage; (iv) all fees and disbursements of counsel for the
Company and, subject to Section 8(b) below, the Holders of Transfer Restricted
Securities; (v) all application and filing fees in connection with listing Notes
on a national securities exchange or automated quotation system; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and other Persons whose financial statements are included in a
Registration Statement (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
-18-
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
counsel selected by the Representative and reasonably acceptable to the Company
(unless such counsel elects not to so act). The Company shall not be required
to pay any underwriting discount, commission or similar fee related to the sale
of any securities.
9. Indemnification and Contribution.
(a) The Company to Indemnify Holders. In connection with a Shelf
--------------------------------
Registration Statement or in connection with any delivery of a Prospectus
contained in an Exchange Offer Registration Statement by any Participating
Broker-Dealer or Initial Purchaser, as applicable, who seeks to sell Exchange
Notes, the Company and Primus Telecommunications, Inc. a Delaware corporation,
and Primus Telecommunications (Australia) Pty. Ltd., a company organized under
the laws of Australia (together, the "Principal Subsidiaries"), jointly and
severally, shall indemnify and hold harmless each Holder of Transfer Restricted
Securities included within any such Shelf Registration Statement and each
Participating Broker-Dealer or Initial Purchaser selling Exchange Notes (each, a
"Participant"), such Participant's officers and directors and each person, if
any, who controls any Participant within the meaning of Section 15 of the
Securities Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Notes), to which such Participant, officer, director or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in (A)
any preliminary Prospectus, Registration Statement or Prospectus or in any
amendment or supplement thereto or (B) any blue sky application or other
document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Exchange Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in any (x) preliminary Prospectus or Prospectus or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, in light of the circumstances in
which they were made, and (y) Registration Statement 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
Participant in connection with, or relating in any manner to, the Notes or the
offering contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters covered in (i) or (ii) above (provided that
-19-
the Company and the Principal Subsidiaries shall not be liable in the case of
any matter covered by this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such act or failure to
act undertaken or omitted to be taken by such Participant through its gross
negligence or wilful misconduct), and shall reimburse each Participant and each
such officer, director or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Participant, officer, director or
controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such
expenses are incurred; 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, Prospectus or Registration Statement, in any
amendment or supplement thereto, or in any Blue Sky Application in reliance upon
and in conformity with written information concerning such Participant furnished
to the Company by or on behalf of any Participant specifically for inclusion
therein; provided further that as to any preliminary Prospectus, this indemnity
agreement shall not inure to the benefit of any Participant or any officer,
director or controlling person of that Participant on account of any loss,
claim, damage, liability or action arising from the sale of the Exchange Notes
or any Notes sold pursuant to a Shelf Registration Statement to any person by
such Participant if (i) that Participant failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act and (ii) the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such preliminary Prospectus was corrected in the Prospectus or
a supplement or amendment thereto, as the case may be, unless in each case, such
failure resulted from noncompliance by the Company with Section 6(c). The
foregoing indemnity agreement is in addition to any liability which the Company
and the Principal Subsidiaries may otherwise have to any Participant or to any
officer, director or controlling person of that Participant. In connection with
any Underwritten Offering permitted by Section 6(c) hereof, the Company and the
Principal Subsidiaries will also indemnify the underwriters, if any, selling
brokers, dealers and similar securities industry professionals participating in
the distribution, their officers and directors and each Person who controls such
Persons (within the meaning of the Securities Act and the Exchange Act) to the
same extent as provided above with respect to the indemnification of the
Holders, if requested in connection with any Registration Statement.
(b) Participants to Indemnify the Company and its Directors,
--------------------------------------------------------
Officers and Controlling Persons. Each Participant, severally and not jointly,
---------------------------------
shall indemnify and hold harmless the Company, its directors and officers, and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or any
such director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any preliminary Prospectus,
Registration Statement or Prospectus or in any amendment or
-20-
supplement thereto or (B) any Blue Sky Application or (ii) the omission or
alleged omission to state in any (x) preliminary Prospectus or Prospectus or in
any amendment or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and (y) Registration
Statement 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 the case of clauses (i) and (ii)
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information concerning such Participant furnished to the Company or
the Trustee by or on behalf of that Participant 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 and the Principal Subsidiaries 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 Participant may otherwise have to the Company or any such
director, officer or controlling person.
(c) Notification of Indemnifying Party; Counsel; Settlement.
-------------------------------------------------------
Promptly after receipt by an indemnified party under this Section 9 of notice
of any claim or the commencement of any action, the indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have
under this Section 9 except to the extent the indemnifying party has been
materially prejudiced by such failure and provided further that the failure to
notify the indemnifying party shall not affect any liability which it may have
to an indemnified party otherwise than under this Section 9. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective directors, officers and
controlling persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the indemnified party against the
indemnifying party under this Section 9 if such indemnified party shall have
been advised in writing that the representation of such indemnified party and
those directors, officers and controlling persons by the same counsel would be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them, and in that event the fees and
expenses of such separate counsel shall be paid by the indemnifying party. It is
understood that the indemnifying party shall not be liable for the fees and
expenses of more than one separate firm
-21-
(in addition to local counsel in each jurisdiction) for all indemnified parties
in connection with any proceeding or related proceedings. Each indemnified
party, as a condition of the indemnity agreements contained in Sections 9(a) and
9(b), shall use its reasonable best efforts to cooperate with the indemnifying
party in the defense of any such action or claim. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final 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
in accordance with this Section 9.
(d) Indemnification Unavailable. If the indemnification provided
---------------------------
for in this Section 9 shall for any reason be unavailable to or insufficient to
hold harmless an indemnified party under Section 9(a) or 9(b) in respect of any
loss, claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Principal Subsidiaries, on the one
hand, and the Participants, on the other hand, from the offering of the Exchange
Notes or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Principal Subsidiaries, on the one hand, and the
Participants, on the other hand, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Principal Subsidiaries, on the one
hand, and the Participants, on the other hand, with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Exchange Notes purchased under this Agreement (before deducting
expenses) received by the Company and the Principal Subsidiaries, on the one
hand, and the total underwriting commissions and discounts received by the
Participants with respect to the Notes purchased under the Purchase Agreement,
on the other hand, bear to the total gross proceeds from the offering of the
Exchange Notes under this Agreement, in each case as set forth in the table on
the cover page of the Memorandum. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company and the Principal Subsidiaries,
on the one hand, or the Participants, on the other hand, the intent of the
parties and their relative knowledge, access to information and opportunity to
-22-
correct or prevent such statement or omission. Each of the Company and the
Principal Subsidiaries and the Participants agrees that it would not be just and
equitable if contributions pursuant to this Section 9(d) were to be determined
by pro rata allocation (even if either the Participants or the Company and the
Principal Subsidiaries, as the case may be, were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 9(d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(d), no Participant shall be required to indemnify
or contribute any amount in excess of the amount by which proceeds received by
the Participants from an offering of the Exchange Notes exceeds the amount of
any damages which such Participant has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 9 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity. The Participants' obligations to contribute as provided in
this Section 9(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The indemnity and contribution provisions contained in this
Section 9 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Initial Purchaser, any Holder or any person controlling any Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any person controlling the Company, (iii) acceptance of any of the
Exchange Notes and (iv) any sale of Transfer Restricted Securities pursuant to a
Shelf Registration Statement.
10. Rule 144A.
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
-23-
11. Participation in Underwritten Registrations.
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, lockup letters and other documents reasonably required under the
terms of such underwriting arrangements.
12. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided that such investment bankers and managers must be
reasonably satisfactory to the Company.
13. Miscellaneous.
(a) Remedies. The Company agrees that monetary damages (including
--------
Liquidated Damages) would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after
--------------------------
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under the provisions of any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take
-------------------------------
any action, or permit any change to occur, with respect to Notes that would
materially and adversely affect the ability of the Holders to Consummate any
Exchange Offer unless such action or change is required by applicable law.
(d) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions
hereof may not be given unless the Company has obtained the written consent of
Holders of at least a majority of the outstanding principal amount of Transfer
Restricted Securities; provided, however, that no amendment, modification,
-24-
supplement, waiver or consent to or departure from the provisions of Section 8
hereof shall be effective as against any Holder of Transfer Restricted
Securities unless consented to in writing by such Holder. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address of such Holder maintained by the
Registrar under the Indenture; and
(ii) if to the Company or any of the
Principal Subsidiaries:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to the Initial Purchasers:
▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
New York, New York 10285
Attention: Syndicate Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; and
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BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; and
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Department
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation, and without the need for an
express assignment, subsequent Holders of Transfer Restricted Securities;
provided, however, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms of the Purchase Agreement; provided further that this Agreement shall
not inure to the benefit of or be binding upon a successor, transferee or assign
of a Holder unless and to the extent such successor, transferee or assign
acquired Transfer Restricted Securities from such Holder. If any transferee of
any Holder shall acquire Transfer Restricted Securities, in any manner, whether
by operation of law or otherwise, such Transfer Restricted Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Transfer Restricted Securities such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement and such Person shall be entitled to receive the benefits hereof.
The Initial Purchasers (in their capacity as Initial Purchasers) shall have no
liability or obligation to the Company with respect to any failure by a Holder
to comply with, or breach by any Holder of, any of the obligations of such
Holder under this Agreement.
(g) Purchases and Sales of Notes. The Company shall not, and
----------------------------
shall use its reasonable best efforts to cause its affiliates (as defined in
Rule 405 under the Securities Act) not to, purchase and then resell or otherwise
transfer any Notes.
-26-
(h) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and such Initial Purchasers
shall have the right to enforce such agreements directly to the extent they deem
such enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.
(i) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(j) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(k) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(l) Consent to Jurisdiction. Each party irrevocably agrees that any
-----------------------
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("Related Proceedings") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "Specified Courts"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"Related Judgment"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Primus Telecommunications
(Australia) Pty. Ltd. hereby irrevocably appoints CT Corporation System, which
currently maintains a New York City office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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.
(m) 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
-27-
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.
(n) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(o) Entire Agreement. This Agreement, together with each of the
----------------
Related Transaction Documents, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(p) Required Consents. Whenever the consent or approval of Holders
-----------------
of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
14. Additional Representations of Primus Telecommunications,
Incorporated and Primus Telecommunications Pty. Ltd.
The Registration Rights Agreement has been duly authorized by Primus
Telecommunications, Incorporated and Primus Telecommunications Pty. Ltd. (the
"Principal Subsidiaries"), and when duly executed by the proper officers of the
Principal Subsidiaries (assuming due execution and delivery by the Initial
Purchasers) and delivered by the Company, will constitute a valid and legally
binding agreement of the Company enforceable against the Company in accordance
with its terms, except (i) where the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to rights of creditors
and other obligees generally, (ii) where the remedy of specific performance and
other forms of equitable relief may be subject to certain equitable defenses and
principles and to the discretion of the court before which the proceedings may
be brought and (iii) where rights to indemnity and contribution thereunder may
be limited by applicable law and public policy.
-28-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PRIMUS TELECOMMUNICATIONS
GROUP, INC.
By: /s/ K. ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: K. ▇▇▇▇ ▇▇▇▇▇
Title: President & Chief
Executive Officer
PRIMUS TELECOMMUNICATIONS
INCORPORATED
By: /s/ K. ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: K. ▇▇▇▇ ▇▇▇▇▇
Primus Telecommunications (Australia)
Pty. Ltd.
Accepted, May 19, 1998 By: /s/ K. ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: K. ▇▇▇▇ ▇▇▇▇▇
Title: President & Chief
Executive Officer
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Band
-----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Band
Title: Managing Director
Acting severally on behalf of itself
and the other Initial Purchasers named
in Schedule I to the Purchase Agreement.
By: ▇▇▇▇▇▇ Brothers Inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Band
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Band
Title: Managing Director
-29-