View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
----------------------------------------------------
(Name of Issuer)
Common Stock, $.01 Par Value
-------------------------------------------
(Title of Class of Securities)
741929103
----------------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
(212) 872-1000
------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 1, 1997
--------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]**. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following page(s)
Page 1 of 84 Pages
Exhibit Index: Page 32
- -----------------
** A filing fee is not being paid with this statement pursuant to SEC
Release No. 33-7331 whereby the filing fee has been eliminated for
Schedule 13D.
Page 2 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QUANTUM INDUSTRIAL PARTNERS LDC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 652,050
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
652,050
11 Aggregate Amount Beneficially Owned by Each Reporting Person
652,050
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
3.63%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT INVESTOR, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 652,050
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
652,050
11 Aggregate Amount Beneficially Owned by Each Reporting Person
652,050
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
3.63%
14 Type of Reporting Person*
PN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
QIH MANAGEMENT, INC.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 652,050
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
652,050
11 Aggregate Amount Beneficially Owned by Each Reporting Person
652,050
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
3.63%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
SOROS FUND MANAGEMENT LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 652,050
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
652,050
11 Aggregate Amount Beneficially Owned by Each Reporting Person
652,050
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
3.63%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 6 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
GEORGE SOROS (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 1,043,280
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
1,043,280
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,043,280
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
5.78%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 7 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
STANLEY F. DRUCKENMILLER (in the capacity described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 652,050
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
652,050
11 Aggregate Amount Beneficially Owned by Each Reporting Person
652,050
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
3.63%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 8 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
S-C PHOENIX HOLDINGS, L.L.C.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 391,230
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 391,230
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
391,230
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
2.19%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 9 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 391,230
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
391,230
11 Aggregate Amount Beneficially Owned by Each Reporting Person
391,230
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
2.19%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 10 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE FUND MANAGEMENT, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 391,230
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
391,230
11 Aggregate Amount Beneficially Owned by Each Reporting Person
391,230
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
2.19%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 11 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS II LDC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [x]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Cayman Islands
7 Sole Voting Power
Number of 179,313
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 179,313
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
179,313
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
1.01%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 12 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS II LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 81,506
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 81,506
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
81,506
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
0.46%
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 13 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE ADVISORS LLC
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 260,819
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 260,819
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
260,819
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
1.46%
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 14 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE MANAGEMENT COMPANY
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [_]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 260,819
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 260,819
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
260,819
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
1.46%
14 Type of Reporting Person*
CO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 15 of 84 Pages
SCHEDULE 13D
CUSIP No. 741929103
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
PURNENDU CHATTERJEE (in the capacities described herein)
2 Check the Appropriate Box If a Member of a Group*
a. [_]
b. [X]
3 SEC Use Only
4 Source of Funds*
Not applicable
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 260,819
Shares
Beneficially 8 Shared Voting Power
Owned By 1,043,280
Each
Reporting 9 Sole Dispositive Power
Person 260,819
With
10 Shared Dispositive Power
1,043,280qi
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,304,099
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
7.20%
14 Type of Reporting Person*
IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 16 of 84 Pages
This Statement on Schedule 13D relates to shares of Common Stock,
$0.01 par value per share (the "Shares"), of Primus Telecommunications Group,
Incorporated (the "Issuer"). This Statement is being filed by the Reporting
Persons (as defined herein) to report an agreement between one of the Reporting
Persons and Soros Fund Management LLC, a newly formed Delaware limited liability
company ("SFM LLC"), pursuant to which SFM LLC has been granted investment
discretion over the Shares held for the account of Quantum Industrial Partners
("QIP") to SFM LLC. As a result of this contract, SFM LLC and Mr. Stanley F.
Druckenmiller ("Mr. Druckenmiller"), in his capacity as Lead Portfolio Manager
of SFM LLC, may be deemed to have acquired beneficial ownership of more than 5%
of the outstanding Shares.
ITEM 1. SECURITY AND ISSUER.
This Statement relates to the Shares. The address of the
principal executive offices of the Issuer is 8180 Greensboro Drive, Suite 1100,
McLean, VA 22102.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed on behalf of each of the following
persons (collectively, the "Reporting Persons"):
i) QIP;
ii) QIH Management Investor, L.P. ("QIHMI");
iii) QIH Management, Inc. ("QIH Management");
iv) SFM LLC;
v) Mr. George Soros ("Mr. Soros");
vi) Mr. Druckenmiller;
vii) S-C Phoenix Holdings, L.L.C. ("Phoenix Holdings");
viii) Winston Partners, L.P. ("Winston L.P.");
ix) Chatterjee Fund Management, L.P. ("CFM");
x) Winston Partners II LDC ("Winston LDC");
xi) Winston Partners II LLC ("Winston LLC");
xii) Chatterjee Advisors LLC ("Chatterjee Advisors");
xiii) Chatterjee Management Company ("Chatterjee Management"); and
xiv) Dr. Purnendu Chatterjee ("Dr. Chatterjee").
Page 17 of 84 Pages
The Reporting Persons
QIP, QIHMI and QIH Management
- -----------------------------
QIP is a Cayman Islands exempted limited duration company with
its principal address at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands
Antilles. The principal business of QIP is investment in securities. Current
information concerning the identity and background of the directors and officers
of QIP is set forth in Annex A hereto, which is incorporated by reference in
response to this Item 2.
QIHMI, an investment advisory firm organized as a Delaware
limited partnership, is a minority shareholder of, and (pursuant to constituent
documents of QIP) is vested with investment discretion with respect to the
portfolio assets held for the account of, QIP. The principal business of QIHMI
is to provide management and advisory services to, and to invest in, QIP. QIH
Management, a Delaware corporation of which Mr. Soros is the sole shareholder,
is the sole general partner of QIHMI. The principal business of QIH Management
is to serve as the sole general partner of QIHMI. QIHMI and QIH Management have
their principal offices at 888 Seventh Avenue, 33rd Floor, New York, New York
10106. Pursuant to regulations promulgated under Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Act"), each of QIHMI, by reason of its
investment discretion over the securities owned by QIP, and QIH Management, as
the sole general partner of QIHMI, may be deemed the beneficial owner of
securities (including the Shares) held for the account of QIP.
Mr. Soros (who is more fully described below) is the sole
stockholder and person ultimately in control of QIH Management.
During the past five years, none of QIP, QIHMI, QIH Management
and, to the best knowledge of the Reporting Persons, any person identified in
Annex A hereto has been (a) convicted in a criminal proceeding; or (b) a party
to any civil proceeding as a result of which any of them has been subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws, or finding
any violation with respect to such laws.
SFM LLC, Mr. Soros and Mr. Druckenmiller
- ----------------------------------------
In connection with the restructuring of the business of Soros
Fund Management, a sole proprietorship owned by Mr. Soros, which will now be
conducted through SFM LLC, Mr. Soros has entered into an agreement dated as of
January 1, 1997 with SFM LLC pursuant to which Mr. Soros has, among other
things, agreed to use his best efforts to cause QIH Management, as the general
partner of QIHMI, to act at the direction of SFM LLC, which agreement to so act
shall terminate upon the earlier of (a) the assignment to SFM LLC of the legal
and beneficial ownership interest in QIH Management and (b) the assignment to
SFM LLC of the general partnership interest in QIHMI(the "QIP Contract").
The business of SFM LLC is managed through a Management Committee
(the "Management Committee") comprised of Mr. Soros, Mr. Druckenmiller and Mr.
Gary Gladstein. SFM LLC has its principal office at 888 Seventh Avenue, 33rd
Page 18 of 84 Pages
Floor, New York, New York 10106. Its principal business is to serve, pursuant to
contract, as the principal investment manager to several foreign investment
companies (the "SFM Clients"). Mr. Soros, as Chairman of SFM LLC, has the
ability to direct the investment decisions of SFM LLC and as such may be deemed
to have investment discretion over the securities held for the accounts of the
SFM Clients, including QIP. Mr. Druckenmiller, as Lead Portfolio Manager of SFM
LLC, has the ability to direct the investment decisions of SFM LLC and as such
may be deemed to have investment discretion over the securities held for the
accounts of the SFM Clients, including QIP. Set forth in Annex B hereto and
incorporated by reference in response to this Item 2 and elsewhere in this
Schedule 13D as applicable is a list of the Managing Directors of SFM LLC.
The principal occupation of Mr. Soros, a United States citizen,
is his direction of the activities of SFM LLC, which is carried out in his
capacity as Chairman of SFM LLC at SFM LLC's principal office.
The principal occupation of Mr. Druckenmiller, a United States
citizen, is his position as Lead Portfolio Manager and a Member of the
Management Committee of SFM LLC, which is carried out at SFM LLC's principal
office.
Pursuant to regulations promulgated under Section 13(d) of the
Act, each of SFM LLC, pursuant to the provisions of the QIP Contract, Mr. Soros,
in his capacity as Chairman of SFM LLC, and Mr. Druckenmiller, in his capacity
as Lead Portfolio Manager of SFM LLC, may be deemed a beneficial owner of
securities, including the Shares, held for the account of QIP.
During the past five years, none of SFM LLC, Mr. Soros, Mr.
Druckenmiller and, to the best knowledge of the Reporting Persons, any person
identified in Annex B hereto has been (a) convicted in a criminal proceeding; or
(b) a party to any civil proceeding as a result of which any of them has been
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws, or finding any violation with respect to such laws.
Phoenix Holdings
- ----------------
Phoenix Holdings is a Delaware limited liability company with its
principal place of business at 888 Seventh Avenue, 33rd Floor, New York, New
York 10106. The principal business of Phoenix Holdings is investing in
securities. Mr. Soros and Winston L.P. are the managing members of Phoenix
Holdings with respect to its investment in the Shares, and as a result of their
ability to exercise investment discretion over the Shares held for the account
of Phoenix Holdings, each may be deemed a beneficial owner of the Shares
pursuant to regulations promulgated under Section 13(d) of the Act.
Page 19 of 84 Pages
Phoenix Holdings has not, during the past five years, been (a)
convicted in a criminal proceeding, or (b) a party to any civil proceeding as a
result of which it has been subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to federal or state securities laws, or finding any violation with respect to
such laws.
Winston L.P., CFM, Winston LDC, Winston LLC, Chatterjee Advisors and Chatterjee
Management
- --------------------------------------------------------------------------------
Winston L.P. is a Delaware limited partnership which is
principally engaged in investing in securities. CFM is a Delaware limited
partnership and the general partner of Winston L.P. Dr. Chatterjee is the sole
general partner of CFM. The principal business of CFM is to serve as the sole
general partner of Winston L.P. The principal office of Winston L.P. and CFM is
located at 888 Seventh Avenue, 30th Floor, New York, New York 10106. Pursuant to
regulations promulgated under Section 13(d) of the Act, CFM, as the sole general
partner of Winston L.P., may be deemed a beneficial owner of securities,
including the Shares, held for the account by Winston L.P.
Winston LDC is a Cayman Islands exempted limited duration company
with its principal office at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands
Antilles. Winston LDC was organized as the operating unit of Winston Partners II
Offshore Ltd., an open-end investment company incorporated in the British Virgin
Islands (the "Winston Offshore"). Winston Offshore invests all of its assets in
Winston LDC, and is the largest shareholder in Winston LDC. Chatterjee Advisors
and Chatterjee Fund Investors LDC (an affiliate of Chatterjee Advisors) are also
shareholders of Winston LDC. The principal business of Winston LDC is investing
in securities.
Winston LLC is a limited liability company formed under the laws
of the State of Delaware with its principal office at 888 Seventh Avenue, 30th
Floor, New York, New York 10106. Chatterjee Advisors and Chatterjee Fund
Investors LDC (an affiliate of Chatterjee Advisors) are also shareholders of
Winston LLC. The principal business of Winston LLC is investing in securities.
Chatterjee Advisors, a Delaware limited liability company that is
managed and controlled by Dr. Chatterjee, serves as the manager, and is
responsible for supervising the operations, of each of Winston LDC and Winston
LLC. The principal office of Chatterjee Advisors is located at 888 Seventh
Avenue, 30th Floor, New York, New York 10106. Chatterjee Management, a Delaware
corporation that is managed and controlled by Dr. Chatterjee, serves as
investment advisor to each of Winston LDC and Winston LLC pursuant to investment
management contracts between Chatterjee Management, Chatterjee Advisors and each
of Winston LDC and Winston LLC. As such, Chatterjee Management has full
discretion and authority to make investments in securities (including the
Shares) on behalf of each of Winston LDC and Winston LLC. The principal office
of Chatterjee Management is located at 888 Seventh Avenue, 30th Floor, New York,
New York 10106.
Page 20 of 84 Pages
Pursuant to regulations promulgated under Section 13(d) of the
Act, each of Chatterjee Advisors, as the manager of each of Winston LDC and
Winston LLC, and by reason of its ability as manager to terminate the
contractual relationship of Winston LDC and Winston LLC with Chatterjee
Management within 60 days, and Chatterjee Management, by reason of its voting
and dispositive power over securities held for the accounts of Winston LDC and
Winston LLC, may be deemed to be the beneficial owner of securities (including
the Shares) held for the account of each of Winston LDC and Winston LLC.
During the past five years, none of Winston L.P., CFM, Winston
LDC, Winston Offshore, Winston LLC, Chatterjee Advisors, Chatterjee Fund
Investors LDC, and Chatterjee Management has been: (a) convicted in a criminal
proceeding; or (b) a party to any civil proceeding as a result of which any of
them has been subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Dr. Chatterjee
- --------------
The principal occupation of Dr. Chatterjee, a United States
citizen, is as an investment manager. Dr. Chatterjee has his principal place of
business at 888 Seventh Avenue, 30th Floor, New York, New York 10106. Pursuant
to regulations promulgated under Section 13(d) of the Act, Dr. Chatterjee may be
deemed (i) a beneficial owner of Shares held for the account of QIP (by virtue
of his position as a sub-investment advisor to QIP with respect to the Shares),
and (ii) the beneficial owner of securities (including the Shares) held for the
account of Winston L.P. (as the sole general partner of CFM and the person
ultimately in control of Winston L.P.), Winston II LDC (as manager and the
person ultimately in control of Chatterjee Advisors and Chatterjee Management)
and Winston II LLC (as manager and the person ultimately in control of
Chatterjee Advisors and Chatterjee Management).
On January 13, 1993, the Securities and Exchange Commission (the
"Commission") filed a civil complaint in the United States District Court for
the District of Massachusetts against certain defendants, including Dr.
Chatterjee, wherein the Commission alleged that Dr. Chatterjee engaged in
conduct in violation of, or aided and abetted certain alleged violations of,
Sections 10(b) and 14(e) of the Act and certain rules promulgated thereunder.
Dr. Chatterjee settled the Commission's action on the same date it was filed
without admitting or denying the allegations of the complaint. Dr. Chatterjee
consented to the entry of a Final Judgment restraining and enjoining him from,
inter alia, violating, or aiding and abetting violations of, Sections 10(b) and
14(e) of the Act and the rules promulgated thereunder. Dr. Chatterjee also
agreed to pay a civil penalty of $643,855. During the past five years, Dr.
Chatterjee, has not been convicted in any criminal proceeding.
Page 21 of 84 Pages
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
None of the Reporting Persons has expended any funds or other
consideration within the last 60 days prior to the date hereof to purchase the
Shares held for the accounts of the Reporting Persons.
The Shares held for the accounts of certain of the Reporting
Persons may be held through margin accounts maintained with brokers, which
extend margin credit as and when required to open or carry positions in their
margin accounts, subject to applicable federal margin regulations, stock
exchange rules and such firm's credit policies. The positions held in the margin
accounts, including the Shares, are pledged as collateral security for the
repayment of debit balances in the respective accounts.
ITEM 4. PURPOSE OF TRANSACTION.
All of the Shares reported herein as having been acquired for the
accounts of certain of the Reporting Persons were acquired for investment
purposes. Neither the Reporting Persons, nor, to the best knowledge of the
Reporting Persons, any of the other individuals identified in response to Item
2, has any plans or proposals which relate to or would result in any of the
transactions described in subparagraphs (a) through (j) of Item 4 of Schedule
13D. The Reporting Persons reserve the right to acquire additional securities of
the Issuer, to dispose of such securities at any time or to formulate other
purposes, plans, or proposals regarding the Issuer or any of its securities, to
the extent deemed advisable in light of general investment and trading policies
of the Reporting Persons and/or the SFM Clients, market conditions or other
factors.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) (i) Each of QIP, QIHMI, QIH Management, SFM LLC and Mr.
Druckenmiller may be deemed the beneficial owner of the 652,050 Shares
(approximately 3.63% of the total number of Shares outstanding assuming the
exercise of all currently exercisable warrants held for the account of QIP).
This number consists of (A) 483,000 Shares held for the account of QIP and (B)
169,050 Shares issuable upon exercise of the 169,050 currently exercisable
warrants held for the account of QIP.
(ii) Mr. Soros may be deemed the beneficial owner of
1,043,280 Shares (approximately 5.78% of the outstanding Shares assuming the
exercise of all currently exercisable warrants held for the account of Phoenix
Holdings and QIP). This number consists of (A) 289,800 Shares held for the
account of Phoenix Holdings (B) 101,430 Shares issuable upon the exercise of
101,430 currently exercisable warrants held for the account of Phoenix Holdings,
(C) the 483,000 Shares held for the account of QIP, and (D) the 169,050 Shares
issuable upon the exercise of the 169,050 currently exercisable warrants held
for the account of QIP.
Page 22 of 84 Pages
(iii) Phoenix Holdings may be deemed the beneficial owner of
391,230 Shares (approximately 2.19% of the total number of shares outstanding
assuming the exercise of all currently exercisable warrants held for the account
of Phoenix Holdings). This number consists of (A) 289,800 Shares held for its
account and (B) the 101,430 Shares issuable upon exercise of the 101,430
currently exercisable warrants for its account.
(iv) Winston L.P. and CFM may be deemed the beneficial owner
of 391,230 Shares (approximately 2.19% of the total number of Shares outstanding
assuming the exercise of all currently exercisable warrants held for the account
of Phoenix Holdings). This number consists of (A) 289,800 Shares held for the
account of Phoenix Holdings and (B) 101,430 Shares issuable upon exercise of the
101,430 currently exercisable warrants held for the account of Phoenix Holdings.
(v) Winston LDC may be deemed the beneficial owner of the
179,313 Shares (approximately 1.01% of the total number of Shares outstanding
assuming exercise of all of the warrants held for its account). This number
consists of (A) 132,824 Shares held for its account, and (B) 46,489 Shares
issuable upon exercise of the 46,489 currently exercisable warrants held for its
account.
(vi) Winston LLC may be deemed the beneficial owner of the 81,506
Shares (approximately .46% of the total number of Shares outstanding assuming
exercise of all of the currently exercisable warrants held for its account).
This number consists of (A) 60,375 Shares held for its account and (B) 21,131
Shares issuable upon exercise of the 21,131 currently exercisable warrants held
for its account.
(vii) Chatterjee Management and Chatterjee Advisors may be deemed
the beneficial owner of 260,819 Shares (approximately 1.46% of the total number
of Shares outstanding assuming the exercise of all the currently exercisable
warrants held for the accounts of Winston LDC and Winston LLC). This number
consists of (A) 179,313 Shares which Winston LDC may be deemed to own
beneficially and (B) 81,506 Shares which Winston LLC may be deemed to own
beneficially.
(viii) Dr. Chatterjee may be deemed the beneficial owner of
1,304,099 Shares (approximately 7.20% of the total number of Shares outstanding
assuming exercise of all currently exercisable warrants held for the accounts of
QIP, Phoenix Holdings, Winston LDC and Winston LLC). This number consists of (A)
260,819 Shares which Chatterjee Management and Chatterjee Advisors may be deemed
to own beneficially, (B) 391,230 Shares which CFM and Winston L.P. may be deemed
to own beneficially and (C) 652,050 Shares which QIP may be deemed to own
beneficially.
(b) (i) Each of QIP, QIHMI, QIH Management, SFM LLC (by virtue of
the QIP contract), Mr. Soros (as result of his position with SFM LLC), Mr.
Druckenmiller (as a result of his position with SFM LLC) and Dr. Chatterjee (as
Page 23 of 84 Pages
a result of his position as a sub-investment advisor to QIP with respect to the
Shares) may be deemed to have the shared power to direct the voting and
disposition of the 652,050 Shares held for the account of QIP (assuming exercise
of all currently exercisable warrants held for the account of QIP).
(ii) Phoenix Holdings may be deemed to have the sole power
to vote and dispose of the 391,230 Shares held for its account (assuming
exercise of all the warrants held for the account of Phoenix Holdings). Mr.
Soros and Winston L.P. (in their capacity as managing members of Phoenix
Holdings) may be deemed to have shared power to direct the voting and
disposition of such Shares. CFM (in its capacity as sole general partner of
Winston L.P.) and Dr. Chatterjee (in its capacity as sole general partner of
CFM) may be deemed to have the shared power to direct the voting and disposition
of such Shares.
(iii) Each of Winston LDC, Chatterjee Advisors (in its
capacity as manager of Winston LDC), Chatterjee Management (in its capacity as
investment advisor to Winston LDC) and Dr. Chatterjee (as the person ultimately
in control of both Chatterjee Advisors and Chatterjee Management) may be deemed
to have the sole power to direct the voting and disposition of the 179,313
Shares held for the account of Winston LDC (assuming exercise of all currently
exercisable warrants held for the account of Winston LDC).
(iv) Each of Winston LLC, Chatterjee Advisors (in its
capacity as manager of Winston LLC), Chatterjee Management (in its capacity as
investment advisor to Winston LLC) and Dr. Chatterjee (in its capacity as the
person ultimately in control of both Chatterjee Advisors and Chatterjee
Management) may be deemed to have the sole power to direct the voting and
disposition of the 81,506 Shares held for the account of Winston LLC (assuming
exercise of all the warrants held for the account of Winston LLC).
(c) Except as disclosed in Item 2 hereof, which is incorporated
by reference in this Item 5, there have been no transactions effected with
respect to the Shares since November 2, 1996 (60 days prior to the date hereof)
by any of the Reporting Persons.
(d) (i) The shareholders of QIP, including Quantum Industrial
Holdings Ltd., a British Virgin Islands international business company, have the
right to participate in the receipt of dividends from, or proceeds from the sale
of, the securities, including the Shares, held for the account of QIP in
accordance with their ownership interests in QIP.
(ii) The members of Phoenix Holdings have the right to
participate in the receipt of dividends from, or proceeds from the sale of,
securities, including the Shares, held for the account of Phoenix Holdings in
accordance with their ownership interests in Phoenix Holdings.
Page 24 of 84 Pages
(iii) The shareholders of Winston LDC, including Winston
Offshore, have the right to participate in the receipt of dividends from, or
proceeds from the sale of, securities, including the Shares, held by Winston LDC
in accordance with their ownership interests in Winston LDC.
(iv) The members of Winston LLC have the right to
participate in the receipt of dividends from, or proceeds from the sale of,
securities, including the Shares, held by Winston LLC in accordance with their
ownership interests in Winston LLC.
(v) The partners of Winston L.P. have the right to
participate in the receipt of dividends from, or proceeds from the sale of
securities, including the Shares, held for the account of Winston L.P. in
accordance with their partnership interests in Winston L.P.
(e) Not applicable.
Each of QIP, Phoenix Holdings, Winston LLC and Winston LDC
also have the right, pursuant to Common Stock Purchase Warrants, forms of which
are attached hereto as Exhibits J, K, L and M, on and after July 31, 1997, to
acquire additional Shares, in the amounts and on the terms set forth in such
Common Stock Purchase Warrants.
Each of QIP, QIHMI, QIH Management, SFM LLC and Mr.
Druckenmiller expressly disclaims beneficial ownership of any Shares not held
directly for the accounts of QIP. Mr. Soros expressly disclaims beneficial
ownership of any Shares not held directly for the accounts of Phoenix Holdings
and QIP. Each of Chatterjee Advisors and Chatterjee Management expressly
disclaims beneficial ownership of any Shares not held directly for the accounts
Winston LDC and Winston LLC. Winston LDC expressly disclaims beneficial
ownership of any Shares not held for its account. Winston LLC expressly
disclaims beneficial ownership of any Shares not held directly for its account.
Each of Winston L.P. and CFM expressly disclaims beneficial ownership of any
Shares not held directly for the account of Winston L.P. Phoenix Holdings
expressly disclaims beneficial ownership of any Shares not held directly for its
account.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS IN RELATIONSHIP WITH
RESPECT TO SECURITIES OF THE ISSUER.
In connection with its acquisition of Shares, certain of the
Reporting Persons entered into (i) a Securities Purchase Agreement dated July
31, 1996 attached hereto as Exhibit G and incorporated herein by reference, (ii)
Page 25 of 84 Pages
a Securityholders' Agreement dated July 31, 1996 attached hereto as Exhibit H
and incorporated herein by reference and (iii) a Registration Rights Agreement
dated July 31, 1996 attached hereto as Exhibit I and incorporated herein by
reference. In addition, QIP, Phoenix Holdings, Winston LLC and Winston LDC were
issued Common Stock Purchase Warrants substantially in the forms attached hereto
as Exhibit J, K, L and M, respectively, each of which is also incorporated
herein by reference.
From time to time, each of the Reporting Persons and/or the SFM
Clients may lend portfolio securities to brokers, banks or other financial
institutions. These loans typically obligate the borrower to return the
securities, or an equal amount of securities of the same class, to the lender
and typically provide that the borrower is entitled to exercise voting rights
and to retain dividends during the term of the loan. From time to time to the
extent permitted by applicable laws, the Reporting Persons and/or the SFM
Clients may borrow securities, including the Shares, for the purpose of
effecting, and may effect, short sale transactions, and may purchase securities
for the purpose of closing out short positions in such securities.
Except as disclosed herein, the Reporting Persons and the SFM
Clients do not have any contracts, arrangements, understandings or relationships
with respect to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Power of Attorney, dated as of January 1, 1997, granted by Mr.
Soros in favor of Mr. Sean C. Warren and Mr. Michael C. Neus.
B. Power of Attorney, dated as of January 1, 1997, granted by Mr.
Druckenmiller in favor of Mr. Sean C. Warren and Michael C. Neus.
C. Joint Filing Agreement, dated as of January 1, 1997, by and
among QIP, QIHMI, QIH Management, SFM LLC, Mr. Soros, Mr. Druckenmiller, Phoenix
Holdings, Winston L.P., CFM, Winston LDC, Winston LLC, Chatterjee Advisory,
Chatterjee Management and Dr. Chatterjee.
D. Power of Attorney, dated May 23, 1996, granted by QIP in favor
of Mr. Gary Gladstein, Mr. Sean Warren and Mr. Michael Neus.
E. Power of Attorney, dated May 31, 1995, granted by Dr.
Chatterjee in favor of Mr. Peter Hurwitz.
F. Power of Attorney, dated October 25, 1996, granted by Winston
LDC in favor of Mr. Peter Hurwitz.
G. Securities Purchase Agreement dated July 31, 1996 among the
Issuer, QIP, Phoenix Holdings, Winston LDC and Winston LLC (filed as Exhibit
10.15 to Amendment No. 2 to the Issuer's Form S-1 (Registration No. 33-10875)
and incorporated herein by reference).
H. Securityholders Agreement dated July 31, 1996 by and among the
Issuer, K. Paul Singh, QIP, Phoenix Holdings, Winston LDC and Winston LLC (filed
as Exhibit 10.10 to the Issuer's Form S-1 Registration No. 33-10875) and
incorporated herein by reference).
Page 26 of 84 Pages
I. Registration Rights Agreement dated July 31, 1996 by and among
the Issuer, QIP, Phoenix Holdings, Winston LDC and Winston LLC (filed as Exhibit
10.11 to the Issuer's Form S-1 (Registration No. 33-10875) and incorporated
herein by reference).
J. Form of the Common Stock Purchase Warrant issued to QIP.
K. Form of the Common Stock Purchase Warrant issued to Phoenix
Holdings.
L. Form of the Common Stock Purchase Warrant issued to Winston
LLC.
M. Form of the Common Stock Purchase Warrant issued to Winston
LDC.
Page 27 of 84 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: January 1, 1997 QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Vice President
QIH MANAGEMENT, INC.
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Managing Director
GEORGE SOROS
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
Page 28 of 84 Pages
STANLEY F. DRUCKENMILLER
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
S-C PHOENIX HOLDINGS, L.L.C.
By: George Soros,
its Manager
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management,
its General Partner
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
------------------------
Peter Hurwitz
Attorney-in-Fact
Page 29 of 84 Pages
CHATTERJEE FUND MANAGEMENT, L.P.
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LDC
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC,
its Manager
By: /S/ PETER HURWITZ
----------------------------
Peter Hurwitz
Manager
CHATTERJEE ADVISORS LLC
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Manager
CHATTERJEE MANAGEMENT COMPANY
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Vice President
PURNENDU CHATTERJEE
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
Page 30 of 84 Pages
ANNEX A
DIRECTORS AND OFFICERS OF QUANTUM INDUSTRIAL PARTNERS LDC
Name/Title/Citizenship Principal Occuption Business Address
- ---------------------- ------------------- ----------------
Curacao Corporation Company Managing Director of Kaya Flamboyan 9
N.V. Netherlands Antilles Willemstad Curacao,
Managing Director corporation Netherlands Antilles
Netherlands Antilles
Inter Caribbean Services Ltd Administrative services Citco Building
Secretary Wickhams Cay
British Virgin Islands) Road Town
Tortola
British Virgin
Islands
Page 31 of 84 Pages
ANNEX B
The following is a list of all of the persons (other than Stanley
Druckenmiller) who serve as Managing Directors of SFM LLC:
Scott K. H. Bessent
Walter Burlock
Jeffrey L. Feinberg
Arminio Fraga
Gary Gladstein
Robert K. Jermain
David N. Kowitz
Alexander C. McAree
Paul McNulty
Gabriel S. Nechamkin
Steven Okin
Dale Precoda
Lief D. Rosenblatt
Mark D. Sonnino
Filiberto H. Verticelli
Sean C. Warren
Each of the above listed persons is a United States citizen whose principal
occupation is serving as Managing Director of SFM LLC, and each has a business
address c\o Soros Fund Management, 888 Seventh Avenue, New York, New York 10106.
During the past five years, none of the above-listed persons has been (i)
convicted in a criminal proceeding, or (ii) a party to any civil proceeding as a
result of which any such persons has been subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding any violations with
respect to such laws.
Page 32 of 84 Pages
INDEX OF EXHIBITS
PAGE
----
A. Power of Attorney, dated as of January 1, 1997, granted
by Mr. George Soros in favor of Mr. Sean C.
Warren and Michael C. Neus............................................. 31
B. Power of Attorney, dated as of January 1, 1997, granted
by Mr. Stanley Druckenmiller in favor of Mr. Sean
C. Warren and Michael C. Neus.......................................... 32
C. Joint Filing Agreement, dated as of January 1,
1997, by and among QIP, QIHMI, QIH Management, SFM
LLC, Mr. Soros, Mr. Druckenmiller, Winston LDC,
Winston LLC, Chatterjee Advisory, Chatterjee
Management and Dr. Chatterjee...........................................33
D. Power of Attorney, dated May 23, 1996, granted by
QIP in favor of Mr. Gary Gladstein, Mr. Sean
Warren and Mr. Michael Neus.............................................36
E. Power of Attorney, dated May 31, 1995, granted by
Dr. Chatterjee in favor of Mr. Peter
Hurwitz................................................................ 37
F. Power of Attorney, dated October 25, 1996, granted
by Winston Partners II LDC in favor of Mr. Peter
Hurwitz................................................................ 38
J. Form of the Common Stock Purchase Warrant issued
to QIP..................................................................39
K. Form of the Common Stock Purchase Warrant issued
to S-C Phoenix Holdings, L.L.C..........................................50
L. Form of the Common Stock Purchase Warrant issued
to Winston Partners LLC......................................... .......61
M. Form of the Common Stock Purchase Warrant issued
to Winston Partners LDC.......................................... ......72
Page 33 of 84 Pages
EXHIBIT A
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, GEORGE SOROS, hereby make, constitute
and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting individually, as
my agent and attorney-in-fact for the purpose of executing in my name, (a) in my
personal capacity or (b) in my capacity as Chairman of, member of or in other
capacities with Soros Fund Management LLC, all documents, certificates,
instruments, statements, filings and agreements ("documents") to be filed with
or delivered to any foreign or domestic governmental or regulatory body or
required or requested by any other person or entity pursuant to any legal or
regulatory requirement relating to the acquisition, ownership, management or
disposition of securities or other investments, and any other documents relating
or ancillary thereto, including but not limited to, all documents relating to
filings with the United States Securities and Exchange Commission (the "SEC")
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934
(the "Act") and the rules and regulations promulgated thereunder, including: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(f) and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ George Soros
---------------------------------------
GEORGE SOROS
Page 34 of 84 Pages
EXHIBIT B
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, STANLEY F. DRUCKENMILLER, hereby make,
constitute and appoint each of SEAN C. WARREN and MICHAEL C. NEUS, acting
individually, as my agent and attorney-in-fact for the purpose of executing in
my name, (a) in my personal capacity or (b) in my capacity as Lead Portfolio
Manager of, member of or in other capacities with Soros Fund Management LLC, all
documents, certificates, instruments, statements, filings and agreements
("documents") to be filed with or delivered to any foreign or domestic
governmental or regulatory body or required or requested by any other person or
entity pursuant to any legal or regulatory requirement relating to the
acquisition, ownership, management or disposition of securities or other
investments, and any other documents relating or ancillary thereto, including
but not limited to, all documents relating to filings with the United States
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Act") and the rules and
regulations promulgated thereunder, including: (1) all documents relating to the
beneficial ownership of securities required to be filed with the SEC pursuant to
Section 13(d) or Section 16(a) of the Act including, without limitation: (a) any
acquisition statements on Schedule 13D or Schedule 13G and any amendments
thereto, (b) any joint filing agreements pursuant to Rule 13d-1(f) and (c) any
initial statements of, or statements of changes in, beneficial ownership of
securities on Form 3, Form 4 or Form 5 and (2) any information statements on
Form 13F required to be filed with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument as of the 1st day of
January, 1997.
/s/ Stanley F. Druckenmiller
---------------------------------------
STANLEY F. DRUCKENMILLER
Page 35 of 84 Pages
EXHIBIT C
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D
with respect to the Common Stock of Primus Telecommunications Group,
Incorporated dated January 1, 1997 and any amendments thereto signed by each of
the undersigned shall be filed on behalf of each of us pursuant to and in
accordance with the provisions of Rule 13d-1(f) under the Securities Exchange
Act of 1934.
Date: January 1, 1997 QUANTUM INDUSTRIAL PARTNERS LDC
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Vice President
QIH MANAGEMENT, INC.
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Vice President
SOROS FUND MANAGEMENT LLC
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Managing Director
GEORGE SOROS
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
Page 36 of 84 Pages
STANLEY F. DRUCKENMILLER
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
S-C PHOENIX HOLDINGS, L.L.C.
By: George Soros,
its Manager
By: /S/ SEAN C. WARREN
----------------------------------
Sean C. Warren
Attorney-in-Fact
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management,
its General Partner
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
------------------------
Peter Hurwitz
Attorney-in-Fact
Page 37 of 84 Pages
CHATTERJEE FUND MANAGEMENT, L.P.
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LDC
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC,
its Manager
By: /S/ PETER HURWITZ
----------------------------
Peter Hurwitz
Manager
CHATTERJEE ADVISORS LLC
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Manager
CHATTERJEE MANAGEMENT COMPANY
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Vice President
PURNENDU CHATTERJEE
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Attorney-in-Fact
Page 38 of 84 Pages
EXHIBIT D
QUANTUM INDUSTRIAL PARTNERS LDC
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that the undersigned QUANTUM INDUSTRIAL PARTNERS
LDC (the "Company"), an exempted limited duration company existing and operating
under the laws of the Cayman Islands does, pursuant to a duly adopted resolution
of its Managing Director, hereby designate, constitute and appoint:
GARY GLADSTEIN, SEAN WARREN and MICHAEL NEUS
acting, singly and not jointly, as its true and lawful agent and attorney in
fact for the purpose of executing in its name, all documents, certificates,
instruments, statements, filings and agreements ("documents") to be filed with
or delivered to any foreign or domestic governmental or regulatory body or
required or requested by any other person or entity pursuant to any legal or
regulatory requirement relating to the acquisition, ownership, management or
disposition of securities or other investments, and any other documents relating
or ancillary thereto, including but not limited to, all documents relating to
filings with the United States Securities and Exchange Commission (the "SEC")
pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934
(the "Act") and the rules and regulations promulgated thereunder, including: (1)
all documents relating to the beneficial ownership of securities required to be
filed with the SEC pursuant to Section 13(d) or Section 16(a) of the Act
including, without limitation: (a) any acquisition statements on Schedule 13D or
Schedule 13G and any amendments thereto, (b) any joint filing agreements
pursuant to Rule 13d-1(f) and (c) any initial statements of, or statements of
changes in, beneficial ownership of securities on Form 3, Form 4 or Form 5 and
(2) any information statements on Form 13F required to be filed with the SEC
pursuant to Section 13(f) of the Act.
Each attorney-in-fact is hereby authorized and empowered to perform all other
acts and deeds, which he or she in his or her sole discretion deems necessary or
appropriate to carry out to the fullest extent the terms and the intent of the
foregoing. All prior acts of each attorney-in-fact in furtherance of the
foregoing are hereby ratified and confirmed.
IN WITNESS WHEREOF, the Company has caused this document to be execute this 23rd
day of May, 1996.
QUANTUM INDUSTRIAL PARTNERS LDC
-----------------------------------------
Curacao Corporation Company N.V.
Managing Director
Page 39 of 84 Pages
EXHIBIT E
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that I, PURNENDU CHATTERJEE, hereby make,
constitute and appoint PETER HURWITZ as my agent and attorney in fact for the
purpose of executing in my name or in my personal capacity all documents,
certificates, instruments, statements, filings and agreements ("documents") to
be filed with or delivered to any foreign or domestic governmental or regulatory
body or required or requested by any other person or entity pursuant to any
legal or regulatory requirement relating to the acquisition, ownership,
management or disposition of securities or other investments, and any other
documents relating or ancillary thereto, including but not limited to, all
documents relating to filings with the Securities and Exchange Commission (the
"SEC") pursuant to the Securities Act of 1933 or the Securities Exchange Act of
1934 (the "Act") and the rules and regulations promulgated thereunder,
including: (1) all documents relating to the beneficial ownership of securities
required to be filed with the SEC pursuant to Section 13(d) or Section 16(a) of
the Act including, without limitation: (a) any acquisition statements on
Schedule 13D or Schedule 13G and any amendments thereto, (b) any joint filing
agreements pursuant to Rule 13(d)-1(f) and (c) any initial statements of, or
statements of changes in, beneficial ownership of securities on Form 3, Form 4
or Form 5 and (2) any information statements on Form 13F required to be filed
with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by me.
IN WITNESS WHEREOF, I have executed this instrument this 31st day of May, 1995.
/s/ Purnendu Chatterjee
--------------------------------------------
PURNENDU CHATTERJEE
Page 40 of 84 Pages
EXHIBIT F
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that the undersigned, Winston Partners II LDC
(the "Company"), a Cayman Islands exempted limited duration company, hereby
makes, constitutes and appoints PETER A. HURWITZ as the Company's agent and
attorney in fact for the purpose of executing on behalf of the Company, all
documents, certificates, instruments, statements, filings and agreements
("documents") to be filed with or delivered to any foreign or domestic
governmental or regulatory body or required or requested by any other person or
entity pursuant to any legal or regulatory requirement relating to the
acquisition, ownership, management or disposition of securities or other
investments, and any other documents relating or ancillary thereto, including
but not limited to, all documents relating to filings with the United States
Securities and Exchange Commission (the "SEC") pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 (the "Act") and the rules and
regulations promulgated thereunder, including: (1) all documents relating to the
beneficial ownership of securities required to be filed with the SEC pursuant to
Section 13(d) or Section 16(a) of the Act including, without limitation: (a) any
acquisition statements on Schedule 13D or Schedule 13G and any amendments
thereto, (b) any joint filing agreements pursuant to Rule 13d-1(f) and (c) any
initial statements of, or statements of changes in, beneficial ownership of
securities on Form 3, Form 4 or Form 5 and (2) any information statements on
Form 13F required to be filed with the SEC pursuant to Section 13(f) of the Act.
All past acts of the attorney-in-fact in furtherance of the foregoing are hereby
ratified and confirmed.
This power of attorney shall be valid from the date hereof until revoked by the
Company.
IN WITNESS WHEREOF, the Company has executed this instrument this 25th day of
October, 1996.
WINSTON PARTNERS II LDC
By: /s/ Kieran Conroy /s/ Wiekert Weber
---------------------------------------
Name: Kieran Conroy / Wiekert Weber
Page 41 of 84 Pages
EXHIBIT J
The security represented by this Certificate has
not been registered under the Securities Act of
1933, as amended, or applicable state securities
laws, and may not be transferred or otherwise
disposed of unless it has been registered under
that act or an exemption from registration is
available. The transfer of such secu- rity is
additionally subject to the conditions specified
in the Securityholders' Agreement, dated as of
July 31, 1996 (as amended and modified from time
to time), between the issuer hereof and certain
investors (including the initial holder hereof).
The Corporation reserves the right to refuse the
transfer of such security until such conditions
have been fulfilled with respect to such transfer.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
COMMON STOCK PURCHASE WARRANT
-----------------------------
Certificate No. PW-1
FOR VALUE RECEIVED, Primus Telecommunications Group,
Incorporated, a Delaware corporation (the "Corporation"), hereby grants to
-----------
Quantum Industrial Partners LDC or its registered assigns (the "Registered
----------
Holder" or "Holder") this warrant (the "Warrant") to purchase, in accordance
- ------ ------
with the terms set forth herein, shares of the Corporation's Common Stock, par
value $.01 per share (the "Common Stock"). This Warrant is issued pursuant to
-------------
the Securities Purchase Agreement, dated as of the date hereof (the "Purchase
--------
Agreement"), between, among others, the Corporation and the Holder. Each
- ---------
capitalized term used in this Warrant which is defined in the Purchase Agreement
but not otherwise defined herein has the meaning given such term in the Purchase
Agreement.
This Warrant is subject to the following provisions:
Section 1. Warrant Terms.
-------------
(a) The Warrant is for the purchase of:
(1) 50,000 shares of Common Stock (the "Warrant A Amount")
----------------
at a price equal to the Warrant A Exercise Price. The "Warrant A
---------
Exercise Price" shall be $.01 per share; and
--------------
(2) shares of Common Stock (the "Warrant B Amount")
------------------
totalling (A) that number of shares having a Market Price of
$5,000,000 at the time of exercise of this Warrant with respect
to the Warrant B Amount and (B) either, at the Holder's option,
(x) 42,857 shares (the "Warrant B Fixed Share Amount") or (y)
------------------------------
Page 42 of 84 Pages
39.138943 shares of Common Stock (the "Warrant B Variable Share
-------------------------
Amount") times the number of days from and including the date
------
hereof until and including the date of exercise of this Warrant
with respect to the Warrant B Amount. If the Holder elects to
receive the Warrant B Variable Share Amount as part of its
exercise of this Warrant with respect to the Warrant B Amount,
then the exercise price (the "Warrant B Exercise Price") to be
-------------------------
paid by the Holder to the Corporation shall be $.01 per share of
the applicable Warrant B Amount. If the Holder elects to receive
the Warrant B Fixed Share Amount as part of its exercise of this
Warrant with respect to the Warrant B Amount, then the Warrant B
Exercise Price to be paid by the Holder to the Corporation shall
be the greater of (A) an amount equal to $.01 per share
multiplied by the number of shares comprising the Warrant B
Amount and (B) an amount (the "Warrant B Alternative Exercise
--------------------------------
Price") equal to $1,095.89 multiplied by the number of days
-----
remaining from and after the date of exercise of this Warrant
with respect to the Warrant B Amount until and including the
third anniversary of the date hereof (the"Expiration Date").
---------------
Section 2. Anti-dilution Provisions. In order to prevent dilution
------------------------
of the purchase rights granted under Section 1 of this Warrant, the Warrant A
Amount, the Warrant B Fixed Share Amount and the Warrant B Variable Share Amount
shall be subject to adjustment from time to time pursuant to this Section 2. For
the avoidance of doubt and not withstanding anything contained in this Section 2
to the contrary, in no event shall the Warrant B Exercise Price be reduced to an
amount less than $.01 per share.
(a) Subdivision or Combination of Common Stock. If the
------------------------------------------------
Corporation at any time subdivides or combines (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock or makes a distribution on its Common Stock in shares of
its stock other than Common Stock, then the number and kind of shares of capital
stock of the Corporation issuable upon exercise of this Warrant (as in effect
immediately prior to such action) shall be adjusted so, and provisions shall be
made to insure, that the Holder may receive, upon exercise of this Warrant, the
aggregate number and kind of shares of capital stock of the Corporation which
such Holder would have received immediately following such action if this
Warrant had been exercised immediately prior to such action.
(b) Reorganization, Reclassification, Consolidation, Merger or
-------------------------------------------------------------
Sale. Any recapitalization, reorganization, reclassification, consolidation,
- ----
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
---------------
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the Holder) to
insure that the Holder shall thereafter have the right to acquire and receive,
Page 43 of 84 Pages
in lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as such Holder would have
received in connection with such Organic Change if such Holder had exercised
this Warrant immediately prior to such Organic Change. In each such case, the
Corporation shall also make appropriate provisions (in form and substance
reasonably satisfactory to the Holder) to insure that the provisions of this
Section 2 shall thereafter be applicable to this Warrant. The Corporation shall
not effect any such Organic Change unless prior to the consummation thereof, the
successor entity (if other than the Corporation) resulting from any such Organic
Change or the entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the Holder), the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
Notwithstanding the above provisions of this paragraph (b), the successor entity
(if other than the Corporation) resulting from any such Organic Change or the
entity purchasing such assets (the "Acquiring Entity") may require that this
-----------------
Warrant be fully exercised as of the date of the consummation of such Organic
Change with the Holder having full rights to receive the consideration offered
to the other securityholders of the Corporation on the basis of such fully
exercised amount as of such date; provided, that if, as a result of such
--------
acceleration of exercise the Holder would have short swing profits under Section
16 of the Securities Exchange Act of 1934, as amended, such acceleration of
exercise shall be postponed until such liability of the Holder no longer exists.
(c) Certain Events. The Corporation shall not take any action(s)
--------------
as a result of which the Holder would be required to pay an aggregate Exercise
Price greater than the aggregate Exercise Price which such Holder would have had
to pay immediately prior to such action(s).
(d) Notices. Immediately upon any adjustment required pursuant to
-------
the terms of this Section 2, the Corporation shall give written notice thereof
to the Holder, setting forth in reasonable detail and certifying the calculation
of such adjustment. The Corporation shall give written notice to the Holder at
least 20 days prior to the date on which the Corporation closes its books or
establishes a record date (A) with respect to any dividend or distribution upon
Common Stock or (B) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(e) Definitions.
-----------
"Business Day" means any day other than a Saturday, Sunday or
-------------
other day on which banking institutions are authorized or required by law or
executive order to close in New York, New York.
"Exercise Price" means the Warrant A Exercise Price and the
---------------
Warrant B Exercise Price, or the Warrant B Alternative Exercise Price, as the
case may be.
Page 44 of 84 Pages
"Market Price" means the volume-weighted average sales price per
------------
share of Common Stock as reported by Bloomberg Information Systems, Inc. during
a period of 21 days consisting of the day as of which "Market Price" is being
determined and the 20 consecutive Business Days prior to such day. If at any
time shares of the Common Stock are not listed on any securities exchange or
quoted in the NASDAQ System or the over-the-counter market, the "Market Price"
shall be the fair value thereof determined by an investment bank mutually agreed
between the parties. If such parties are unable to reach agreement within a
reasonable period of time, each party will choose and bear the expense of an
investment bank to value the shares of Common Stock and the average of the two
valuations shall be the value.
"Qualified Public Offering" means an underwritten public offering
-------------------------
of Common Stock pursuant to an effective Registration Statement under the
Securities Act of 1933, as then in effect or any comparable statement under any
similar federal statute then in force or effect, pursuant to which at least
1,000,000 shares of Common Stock are sold at a price per share of at least $35
(before underwriting commissions).
Section 3. Expiration of Warrant; Exercise of Warrant.
------------------------------------------
(a) If a Qualified Public Offering has not occurred prior to the
first anniversary of the date hereof (the "First Anniversary"), the portion of
------------------
this Warrant with respect to the Warrant B Amount only shall be automatically
exercised in full; provided, that, with respect to such automatic exercise, the
--------
Holder has the right to elect to receive either the Warrant B Fixed Share Amount
or the Warrant B Variable Share Amount in accordance with Section 1(a)(2).
(b) Subject to paragraph (a) above, the Holder shall have the
right to (A) exercise all or any portion of this Warrant with respect to the
Warrant A Amount at any time and from time to time on or prior to the Expiration
Date and (B) exercise all but not less than all of this Warrant with respect to
the Warrant B Amount at any time during the period commencing on the First
Anniversary and ending on the Expiration Date.
(c) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to (A) the Warrant A Amount and (B)
the Warrant B Amount (only to the extent that the Warrant B Exercise Price paid
by the Holder is not the Warrant B Alternative Exercise Price), in any and all
such cases, by surrendering at the principal office of the Corporation this
Warrant and a completed Exercise Agreement (in the form of Exhibit I hereto)
and:
(i) paying the applicable Exercise Price by check or wire
transfer to an account designated by the Corporation as to the number of shares
of Common Stock as to which the Warrant is being exercised (the "Exercise
--------
Amount") and receiving in exchange therefor the number of shares of Common Stock
- ------
equal to the Exercise Amount;
Page 45 of 84 Pages
(ii) receiving in exchange therefor the number of shares
equal to the product of the Exercise Amount multiplied by a fraction, the
numerator of which is the Market Price less the applicable Exercise Price and
the denominator of which is such Market Price; and/or
(iii) surrendering shares of Common Stock of the Corporation
(valued at the Market Price) equal to the applicable Exercise Price and
receiving in exchange therefor the number of shares of Common Stock equal to the
Exercise Amount.
(d) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to the Warrant B Amount (to the
extent that the Warrant B Exercise Price paid by the Holder is the Warrant B
Alternative Exercise Price) by surrendering at the principal office of the
Corporation this Warrant and a completed Exercise Agreement (in the form of
Exhibit I hereto) and by paying the Warrant B Alternative Exercise Price by
check or wire transfer to an account designated by the Corporation as to the
Exercise Amount and receiving in exchange therefor the number of shares of
Common Stock equal to the Exercise Amount.
(e) A Holder may use one or more of the methods of exercise
outlined in Section 3(c) when exercising this Warrant so long as the completed
Exercise Agreement accurately states which method or methods such Holder intends
to use and the number of shares as to which each such method will be used.
(f) Certificates for shares of Common Stock acquired through
exercise of this Warrant shall be delivered by the Corporation to the Holder
within five (5) Business Days after receipt by the Corporation of the items
required by Sections 3(c) and 3(d) for the respective method or methods of
exercise. Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Corporation shall prepare a new
warrant substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Holder.
(g) The Common Stock issuable upon exercise of this Warrant shall
be deemed to have been issued to the Holder on the date on which the Corporation
receives the completed Exercise Agreement and payment of the Exercise Price, if
any, and such Holder shall be deemed for all purposes to have become the record
holder of such Common Stock on such date.
(h) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such exercise and the related issuance of shares of Common
Stock.
Page 46 of 84 Pages
(i) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as are issuable upon exercise of this Warrant. All such shares of
Common Stock shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance). In addition, prior to the issuance of any Common Stock upon an
exercise of this Warrant, the Corporation shall at its expense use its
reasonable best efforts to procure the listing of such Common Stock which shall
be issued upon exercise of this Warrant as then may be required on all stock
exchanges or interdealer quotation systems on which the Common Stock is then
listed and shall maintain such listing if and so long as any shares of the
Common Stock shall be listed on such stock exchanges or interdealer quotation
systems.
(j) The Corporation shall not be required to issue fractional
shares of Common Stock on the exercise of this Warrant. In the event that the
number of shares of Common Stock calculated pursuant to Section 1 above results
in a fraction, such number shall be rounded down to the nearest whole number.
Notwithstanding the above, fractional shares shall be issued to the extent that
not to do so would result in a material diminution in the aggregate value of the
shares of Common Stock to be received by the Holder in the absence of the
issuance of such fractional shares.
Section 4. Certain Distributions. If, from the date hereof to and
---------------------
including the First Anniversary, the Corporation makes any dividend or other
distribution on its shares of Common Stock or establishes a record date in
respect of any such dividend or distribution (other than a dividend or
distribution covered by Section 2(a) or Section 2(b)), the Holder shall be
entitled to receive, upon exercise of this Warrant, that amount of such dividend
or other distribution which such Holder would have received if this Warrant had
been exercised immediately prior to such record date or dividend or other
distribution, as applicable, and the Corporation shall take all necessary action
to ensure that such amounts are available to be so distributed.
Section 5. Warrant Transferable. Subject to the transfer
----------------------
conditions referred to in the legend endorsed hereon, this Warrant and all
rights hereunder are transferable, in whole or in part, without charge to the
Holder, upon surrender of this Warrant with a properly executed Assignment (in
the form of Exhibit II hereto) at the principal office of the Corporation.
Section 6. Warrant Exchangeable for Different Denominations. This
------------------------------------------------
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Corporation, for new Warrants ("New Warrants"),
-------------
Page 47 of 84 Pages
substantially identical hereto, representing in the aggregate the rights
formerly represented by this Warrant, and each of such New Warrants shall
represent such portion of such rights as is designated by the Holder at the time
of such surrender. The date the Corporation initially issues this Warrant shall
be the date of issuance of such New Warrants regardless of the number of times
new certificates representing the unexpired and unexercised rights formerly
represented by this Warrant shall be issued.
Section 7. Replacement. Upon receipt of an affidavit of the
-----------
Holder as to the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity provided by the Holder, or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate, substantially identical hereto, representing the rights represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.
Section 8. Successors and Assigns. This instrument is intended to
----------------------
bind and inure to the benefit of and be enforceable by the Holder and its
respective heirs, successors and assigns.
Section 9. Amendment and Waiver. Except as otherwise provided
---------------------
herein, the provisions of this Warrant may be amended only if the Corporation
has obtained the written consent of the Holder.
Section 10. Descriptive Headings; Governing Law. The descriptive
------------------------------------
headings of this Warrant are inserted for convenience only and do not constitute
a part of this Warrant. The laws of the State of New York will govern this
Agreement without giving effect to any choice of law or conflict of law
provision or rule.
Section 11. Complete Agreement; Severability. Except as otherwise
--------------------------------
expressly set forth herein, this Warrant, the Purchase Agreement and any other
agreement executed by the parties and contemplated by the Purchase Agreement
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
Whenever possible, each provision of this Warrant will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Warrant will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
Page 48 of 84 Pages
Section 12. Notices. Except as otherwise expressly provided
-------
herein, all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. mail (i) to the Corporation, at its principal executive
offices and (ii) to the Holder, at the address set forth in the Purchase
Agreement with copies to such persons as are indicated therein.
* * * *
Page 49 of 84 Pages
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed and attested by its duly authorized officers and to be dated the date of
issuance hereof.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Date: July 31, 1996 By: /S/ K. PAUL SINGH
--------------------------------------------
K. Paul Singh
President, Chief Executive Officer
Attest:
- -----------------------------------
Secretary
Page 50 of 84 Pages
EXHIBIT I
EXERCISE AGREEMENT
------------------
To: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. PW-__), hereby agrees to exercise the Warrant
as to ____________ shares of Common Stock covered by such Warrant (the "Exercise
Amount") at the Exercise Price provided by such Warrant. The following methods
of exercise will be used respectively for the following number of shares:
Method of Exercise Warrant A Amount Warrant B Amount
------------------ being exercised being exercised
---------------- ----------------
Section 3(c)(i)
Section 3(c)(ii)
Section 3(c)(iii)
Section 3(d)
Dated: Signature
-----------------------------
Address
-----------------------------
Page 51 of 84 Pages
EXHIBIT II
ASSIGNMENT
----------
FOR VALUE RECEIVED, ________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (Certificate No. PW-__) with respect to the number of shares of
the Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
- ----------------- ------- -------------
Dated: Signature
----------------------------------
Address
----------------------------------
Witness
----------------------------------
Page 52 of 84 Pages
EXHIBIT K
The security represented by this Certificate has not been
registered under the Securities Act of 1933, as amended, or applicable state
securities laws, and may not be transferred or otherwise disposed of unless it
has been registered under that act or an exemption from registration is
available. The transfer of such secu- rity is additionally subject to the
conditions specified in the Securityholders' Agreement, dated as of July 31,
1996 (as amended and modified from time to time), between the issuer hereof and
certain investors (including the initial holder hereof). The Corporation
reserves the right to refuse the transfer of such security until such conditions
have been fulfilled with respect to such transfer.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
COMMON STOCK PURCHASE WARRANT
-----------------------------
Certificate No. PW-2
FOR VALUE RECEIVED, Primus Telecommunications Group,
Incorporated, a Delaware corporation (the "Corporation"), hereby grants to S-C
-----------
Phoenix Holdings, L.L.C. or its registered assigns (the "Registered Holder" or
------------------
"Holder") this warrant (the "Warrant") to purchase, in accordance with the terms
------ -------
set forth herein, shares of the Corporation's Common Stock, par value $.01 per
share (the "Common Stock"). This Warrant is issued pursuant to the Securities
-------------
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
-------------------
between, among others, the Corporation and the Holder. Each capitalized term
used in this Warrant which is defined in the Purchase Agreement but not
otherwise defined herein has the meaning given such term in the Purchase
Agreement.
This Warrant is subject to the following provisions:
Section 1. Warrant Terms.
-------------
(a) The Warrant is for the purchase of:
(1) 30,000 shares of Common Stock (the "Warrant A Amount")
----------------
at a price equal to the Warrant A Exercise Price. The "Warrant A
---------
Exercise Price" shall be $.01 per share; and
--------------
(2) shares of Common Stock (the "Warrant B Amount")
------------------
totalling (A) that number of shares having a Market Price of
Page 53 of 84 Pages
$3,000,000 at the time of exercise of this Warrant with respect
to the Warrant B Amount and (B) either, at the Holder's option,
(x) 25,714 shares (the "Warrant B Fixed Share Amount") or (y)
------------------------------
23.483366 shares of Common Stock (the "Warrant B Variable Share
-------------------------
Amount") times the number of days from and including the date
------
hereof until and including the date of exercise of this Warrant
with respect to the Warrant B Amount. If the Holder elects to
receive the Warrant B Variable Share Amount as part of its
exercise of this Warrant with respect to the Warrant B Amount,
then the exercise price (the "Warrant B Exercise Price") to be
-------------------------
paid by the Holder to the Corporation shall be $.01 per share of
the applicable Warrant B Amount. If the Holder elects to receive
the Warrant B Fixed Share Amount as part of its exercise of this
Warrant with respect to the Warrant B Amount, then the Warrant B
Exercise Price to be paid by the Holder to the Corporation shall
be the greater of (A) an amount equal to $.01 per share
multiplied by the number of shares comprising the Warrant B
Amount and (B) an amount (the "Warrant B Alternative Exercise
--------------------------------
Price") equal to $657.53 multiplied by the number of days
-----
remaining from and after the date of exercise of this Warrant
with respect to the Warrant B Amount until and including the
third anniversary of the date hereof (the"Expiration Date").
---------------
Section 2. Anti-dilution Provisions. In order to prevent dilution
------------------------
of the purchase rights granted under Section 1 of this Warrant, the Warrant A
Amount, the Warrant B Fixed Share Amount and the Warrant B Variable Share Amount
shall be subject to adjustment from time to time pursuant to this Section 2. For
the avoidance of doubt and not withstanding anything contained in this Section 2
to the contrary, in no event shall the Warrant B Exercise Price be reduced to an
amount less than $.01 per share.
(a) Subdivision or Combination of Common Stock. If the
------------------------------------------------
Corporation at any time subdivides or combines (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock or makes a distribution on its Common Stock in shares of
its stock other than Common Stock, then the number and kind of shares of capital
stock of the Corporation issuable upon exercise of this Warrant (as in effect
immediately prior to such action) shall be adjusted so, and provisions shall be
made to insure, that the Holder may receive, upon exercise of this Warrant, the
aggregate number and kind of shares of capital stock of the Corporation which
such Holder would have received immediately following such action if this
Warrant had been exercised immediately prior to such action.
(b) Reorganization, Reclassification, Consolidation, Merger or
-------------------------------------------------------------
Sale. Any recapitalization, reorganization, reclassification, consolidation,
- ----
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
---------------
Page 54 of 84 Pages
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the Holder) to
insure that the Holder shall thereafter have the right to acquire and receive,
in lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as such Holder would have
received in connection with such Organic Change if such Holder had exercised
this Warrant immediately prior to such Organic Change. In each such case, the
Corporation shall also make appropriate provisions (in form and substance
reasonably satisfactory to the Holder) to insure that the provisions of this
Section 2 shall thereafter be applicable to this Warrant. The Corporation shall
not effect any such Organic Change unless prior to the consummation thereof, the
successor entity (if other than the Corporation) resulting from any such Organic
Change or the entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the Holder), the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
Notwithstanding the above provisions of this paragraph (b), the successor entity
(if other than the Corporation) resulting from any such Organic Change or the
entity purchasing such assets (the "Acquiring Entity") may require that this
-----------------
Warrant be fully exercised as of the date of the consummation of such Organic
Change with the Holder having full rights to receive the consideration offered
to the other securityholders of the Corporation on the basis of such fully
exercised amount as of such date; provided, that if, as a result of such
--------
acceleration of exercise the Holder would have short swing profits under Section
16 of the Securities Exchange Act of 1934, as amended, such acceleration of
exercise shall be postponed until such liability of the Holder no longer exists.
(c) Certain Events. The Corporation shall not take any action(s)
--------------
as a result of which the Holder would be required to pay an aggregate Exercise
Price greater than the aggregate Exercise Price which such Holder would have had
to pay immediately prior to such action(s).
(d) Notices. Immediately upon any adjustment required pursuant to
-------
the terms of this Section 2, the Corporation shall give written notice thereof
to the Holder, setting forth in reasonable detail and certifying the calculation
of such adjustment. The Corporation shall give written notice to the Holder at
least 20 days prior to the date on which the Corporation closes its books or
establishes a record date (A) with respect to any dividend or distribution upon
Common Stock or (B) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(e) Definitions.
-----------
"Business Day" means any day other than a Saturday, Sunday or
-------------
other day on which banking institutions are authorized or required by law or
executive order to close in New York, New York.
Page 55 of 84 Pages
"Exercise Price" means the Warrant A Exercise Price and the
---------------
Warrant B Exercise Price, or the Warrant B Alternative Exercise Price, as the
case may be.
"Market Price" means the volume-weighted average sales price per
------------
share of Common Stock as reported by Bloomberg Information Systems, Inc. during
a period of 21 days consisting of the day as of which "Market Price" is being
determined and the 20 consecutive Business Days prior to such day. If at any
time shares of the Common Stock are not listed on any securities exchange or
quoted in the NASDAQ System or the over-the-counter market, the "Market Price"
shall be the fair value thereof determined by an investment bank mutually agreed
between the parties. If such parties are unable to reach agreement within a
reasonable period of time, each party will choose and bear the expense of an
investment bank to value the shares of Common Stock and the average of the two
valuations shall be the value.
"Qualified Public Offering" means an underwritten public offering
-------------------------
of Common Stock pursuant to an effective Registration Statement under the
Securities Act of 1933, as then in effect or any comparable statement under any
similar federal statute then in force or effect, pursuant to which at least
1,000,000 shares of Common Stock are sold at a price per share of at least $35
(before underwriting commissions).
Section 3. Expiration of Warrant; Exercise of Warrant.
------------------------------------------
(a) If a Qualified Public Offering has not occurred prior to the
first anniversary of the date hereof (the "First Anniversary"), the portion of
------------------
this Warrant with respect to the Warrant B Amount only shall be automatically
exercised in full; provided, that, with respect to such automatic exercise, the
Holder has the right to elect to receive either the Warrant B Fixed Share Amount
or the Warrant B Variable Share Amount in accordance with Section 1(a)(2).
(b) Subject to paragraph (a) above, the Holder shall have the
right to (A) exercise all or any portion of this Warrant with respect to the
Warrant A Amount at any time and from time to time on or prior to the Expiration
Date and (B) exercise all but not less than all of this Warrant with respect to
the Warrant B Amount at any time during the period commencing on the First
Anniversary and ending on the Expiration Date.
(c) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to (A) the Warrant A Amount and (B)
the Warrant B Amount (only to the extent that the Warrant B Exercise Price paid
by the Holder is not the Warrant B Alternative Exercise Price), in any and all
such cases, by surrendering at the principal office of the Corporation this
Warrant and a completed Exercise Agreement (in the form of Exhibit I hereto)
---------
and:
Page 56 of 84 Pages
(i) paying the applicable Exercise Price by check or wire
transfer to an account designated by the Corporation as to the number of shares
of Common Stock as to which the Warrant is being exercised (the "Exercise
--------
Amount") and receiving in exchange therefor the number of shares of Common Stock
- ------
equal to the Exercise Amount;
(ii) receiving in exchange therefor the number of shares
equal to the product of the Exercise Amount multiplied by a fraction, the
numerator of which is the Market Price less the applicable Exercise Price and
the denominator of which is such Market Price; and/or
(iii) surrendering shares of Common Stock of the Corporation
(valued at the Market Price) equal to the applicable Exercise Price and
receiving in exchange therefor the number of shares of Common Stock equal to the
Exercise Amount.
(d) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to the Warrant B Amount (to the
extent that the Warrant B Exercise Price paid by the Holder is the Warrant B
Alternative Exercise Price) by surrendering at the principal office of the
Corporation this Warrant and a completed Exercise Agreement (in the form of
Exhibit I hereto) and by paying the Warrant B Alternative Exercise Price by
check or wire transfer to an account designated by the Corporation as to the
Exercise Amount and receiving in exchange therefor the number of shares of
Common Stock equal to the Exercise Amount.
(e) A Holder may use one or more of the methods of exercise
outlined in Section 3(c) when exercising this Warrant so long as the completed
Exercise Agreement accurately states which method or methods such Holder intends
to use and the number of shares as to which each such method will be used.
(f) Certificates for shares of Common Stock acquired through
exercise of this Warrant shall be delivered by the Corporation to the Holder
within five (5) Business Days after receipt by the Corporation of the items
required by Sections 3(c) and 3(d) for the respective method or methods of
exercise. Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Corporation shall prepare a new
warrant substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Holder.
(g) The Common Stock issuable upon exercise of this Warrant shall
be deemed to have been issued to the Holder on the date on which the Corporation
receives the completed Exercise Agreement and payment of the Exercise Price, if
any, and such Holder shall be deemed for all purposes to have become the record
holder of such Common Stock on such date.
Page 57 of 84 Pages
(h) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such exercise and the related issuance of shares of Common
Stock.
(i) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as are issuable upon exercise of this Warrant. All such shares of
Common Stock shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance). In addition, prior to the issuance of any Common Stock upon an
exercise of this Warrant, the Corporation shall at its expense use its
reasonable best efforts to procure the listing of such Common Stock which shall
be issued upon exercise of this Warrant as then may be required on all stock
exchanges or interdealer quotation systems on which the Common Stock is then
listed and shall maintain such listing if and so long as any shares of the
Common Stock shall be listed on such stock exchanges or interdealer quotation
systems.
(j) The Corporation shall not be required to issue fractional
shares of Common Stock on the exercise of this Warrant. In the event that the
number of shares of Common Stock calculated pursuant to Section 1 above results
in a fraction, such number shall be rounded down to the nearest whole number.
Notwithstanding the above, fractional shares shall be issued to the extent that
not to do so would result in a material diminution in the aggregate value of the
shares of Common Stock to be received by the Holder in the absence of the
issuance of such fractional shares.
Section 4. Certain Distributions. If, from the date hereof to and
---------------------
including the First Anniversary, the Corporation makes any dividend or other
distribution on its shares of Common Stock or establishes a record date in
respect of any such dividend or distribution (other than a dividend or
distribution covered by Section 2(a) or Section 2(b)), the Holder shall be
entitled to receive, upon exercise of this Warrant, that amount of such dividend
or other distribution which such Holder would have received if this Warrant had
been exercised immediately prior to such record date or dividend or other
distribution, as applicable, and the Corporation shall take all necessary action
to ensure that such amounts are available to be so distributed.
Section 5. Warrant Transferable. Subject to the transfer
----------------------
conditions referred to in the legend endorsed hereon, this Warrant and all
rights hereunder are transferable, in whole or in part, without charge to the
Page 58 of 84 Pages
Holder, upon surrender of this Warrant with a properly executed Assignment (in
the form of Exhibit II hereto) at the principal office of the Corporation.
Section 6. Warrant Exchangeable for Different Denominations. This
------------------------------------------------
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Corporation, for new Warrants ("New Warrants"),
-------------
substantially identical hereto, representing in the aggregate the rights
formerly represented by this Warrant, and each of such New Warrants shall
represent such portion of such rights as is designated by the Holder at the time
of such surrender. The date the Corporation initially issues this Warrant shall
be the date of issuance of such New Warrants regardless of the number of times
new certificates representing the unexpired and unexercised rights formerly
represented by this Warrant shall be issued.
Section 7. Replacement. Upon receipt of an affidavit of the
-----------
Holder as to the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity provided by the Holder, or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate, substantially identical hereto, representing the rights represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.
Section 8. Successors and Assigns. This instrument is intended to
----------------------
bind and inure to the benefit of and be enforceable by the Holder and its
respective heirs, successors and assigns.
Section 9. Amendment and Waiver. Except as otherwise provided
---------------------
herein, the provisions of this Warrant may be amended only if the Corporation
has obtained the written consent of the Holder.
Section 10. Descriptive Headings; Governing Law. The descriptive
------------------------------------
headings of this Warrant are inserted for convenience only and do not constitute
a part of this Warrant. The laws of the State of New York will govern this
Agreement without giving effect to any choice of law or conflict of law
provision or rule.
Section 11. Complete Agreement; Severability. Except as otherwise
--------------------------------
expressly set forth herein, this Warrant, the Purchase Agreement and any other
agreement executed by the parties and contemplated by the Purchase Agreement
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
Whenever possible, each provision of this Warrant will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held to be invalid, illegal or unenforceable in any respect
Page 59 of 84 Pages
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Warrant will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
Section 12. Notices. Except as otherwise expressly provided
herein, all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. mail (i) to the Corporation, at its principal executive
offices and (ii) to the Holder, at the address set forth in the Purchase
Agreement with copies to such persons as are indicated therein.
* * * *
Page 60 of 84 Pages
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed and attested by its duly authorized officers and to be dated the date of
issuance hereof.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Date: July 31, 1996 By: /S/ K. PAUL SINGH
-----------------------------
K. Paul Singh
President, Chief Executive Officer
Attest:
- -------------------------
Secretary
Page 61 of 84 Pages
EXHIBIT I
EXERCISE AGREEMENT
------------------
To: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. PW-__), hereby agrees to exercise the Warrant
as to ____________ shares of Common Stock covered by such Warrant (the "Exercise
Amount") at the Exercise Price provided by such Warrant. The following methods
of exercise will be used respectively for the following number of shares:
Method of Exercise Warrant A Amount Warrant B Amount
being exercised being exercised
Section 3(c)(i)
Section 3(c)(ii)
Section 3(c)(iii)
Section 3(d)
Dated: Signature
---------------------------------------
Address
---------------------------------------
Page 62 of 84 Pages
EXHIBIT II
ASSIGNMENT
----------
FOR VALUE RECEIVED, ________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (Certificate No. PW-__) with respect to the number of shares of
the Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
- ----------------- ------- -------------
Dated: Signature
---------------------------------------
Address
---------------------------------------
Witness
---------------------------------------
Page 63 of 84 Pages
EXHIBIT L
The security represented by this Certificate has
not been registered under the Securities Act of
1933, as amended, or applicable state securities
laws, and may not be transferred or otherwise
disposed of unless it has been registered under
that act or an exemption from registration is
available. The transfer of such secu- rity is
additionally subject to the conditions specified
in the Securityholders' Agreement, dated as of
July 31, 1996 (as amended and modified from time
to time), between the issuer hereof and certain
investors (including the initial holder hereof).
The Corporation reserves the right to refuse the
transfer of such security until such conditions
have been fulfilled with respect to such transfer.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
COMMON STOCK PURCHASE WARRANT
-------------------------------
Certificate No. PW-3
FOR VALUE RECEIVED, Primus Telecommunications Group,
Incorporated, a Delaware corporation (the "Corporation"), hereby grants to
-----------
Winston Partners II LLC or its registered assigns (the "Registered Holder" or
------------------
"Holder") this warrant (the "Warrant") to purchase, in accordance with the terms
------ -------
set forth herein, shares of the Corporation's Common Stock, par value $.01 per
share (the "Common Stock"). This Warrant is issued pursuant to the Securities
-------------
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
-------------------
between, among others, the Corporation and the Holder. Each capitalized term
used in this Warrant which is defined in the Purchase Agreement but not
otherwise defined herein has the meaning given such term in the Purchase
Agreement.
This Warrant is subject to the following provisions:
Section 1. Warrant Terms.
-------------
(a) The Warrant is for the purchase of:
(1) 6,250 shares of Common Stock (the "Warrant A Amount") at
a price equal to the Warrant A Exercise Price. The "Warrant A
Exercise Price" shall be $.01 per share; and
(2) shares of Common Stock (the "Warrant B Amount")
totalling (A) that number of shares having a Market Price of
Page 64 of 84 Pages
$625,000 at the time of exercise of this Warrant with respect to
the Warrant B Amount and (B) either, at the Holder's option, (x)
5,357 shares (the "Warrant B Fixed Share Amount") or (y) 4.892368
----------------------------
shares of Common Stock (the "Warrant B Variable Share Amount")
---------------------------------
times the number of days from and including the date hereof until
and including the date of exercise of this Warrant with respect
to the Warrant B Amount. If the Holder elects to receive the
Warrant B Variable Share Amount as part of its exercise of this
Warrant with respect to the Warrant B Amount, then the exercise
price (the "Warrant B Exercise Price") to be paid by the Holder
-------------------------
to the Corporation shall be $.01 per share of the applicable
Warrant B Amount. If the Holder elects to receive the Warrant B
Fixed Share Amount as part of its exercise of this Warrant with
respect to the Warrant B Amount, then the Warrant B Exercise
Price to be paid by the Holder to the Corporation shall be the
greater of (A) an amount equal to $.01 per share multiplied by
the number of shares comprising the Warrant B Amount and (B) an
amount (the "Warrant B Alternative Exercise Price") equal to
---------------------------------------
$136.99 multiplied by the number of days remaining from and after
the date of exercise of this Warrant with respect to the Warrant
B Amount until and including the third anniversary of the date
hereof (the"Expiration Date").
---------------
Section 2. Anti-dilution Provisions. In order to prevent dilution
------------------------
of the purchase rights granted under Section 1 of this Warrant, the Warrant A
Amount, the Warrant B Fixed Share Amount and the Warrant B Variable Share Amount
shall be subject to adjustment from time to time pursuant to this Section 2. For
the avoidance of doubt and not withstanding anything contained in this Section 2
to the contrary, in no event shall the Warrant B Exercise Price be reduced to an
amount less than $.01 per share.
(a) Subdivision or Combination of Common Stock. If the
------------------------------------------------
Corporation at any time subdivides or combines (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock or makes a distribution on its Common Stock in shares of
its stock other than Common Stock, then the number and kind of shares of capital
stock of the Corporation issuable upon exercise of this Warrant (as in effect
immediately prior to such action) shall be adjusted so, and provisions shall be
made to insure, that the Holder may receive, upon exercise of this Warrant, the
aggregate number and kind of shares of capital stock of the Corporation which
such Holder would have received immediately following such action if this
Warrant had been exercised immediately prior to such action.
(b) Reorganization, Reclassification, Consolidation, Merger or
-------------------------------------------------------------
Sale. Any recapitalization, reorganization, reclassification, consolidation,
- ----
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
---------------
Page 65 of 84 Pages
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the Holder) to
insure that the Holder shall thereafter have the right to acquire and receive,
in lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as such Holder would have
received in connection with such Organic Change if such Holder had exercised
this Warrant immediately prior to such Organic Change. In each such case, the
Corporation shall also make appropriate provisions (in form and substance
reasonably satisfactory to the Holder) to insure that the provisions of this
Section 2 shall thereafter be applicable to this Warrant. The Corporation shall
not effect any such Organic Change unless prior to the consummation thereof, the
successor entity (if other than the Corporation) resulting from any such Organic
Change or the entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the Holder), the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
Notwithstanding the above provisions of this paragraph (b), the successor entity
(if other than the Corporation) resulting from any such Organic Change or the
entity purchasing such assets (the "Acquiring Entity") may require that this
-----------------
Warrant be fully exercised as of the date of the consummation of such Organic
Change with the Holder having full rights to receive the consideration offered
to the other securityholders of the Corporation on the basis of such fully
exercised amount as of such date; provided, that if, as a result of such
--------
acceleration of exercise the Holder would have short swing profits under Section
16 of the Securities Exchange Act of 1934, as amended, such acceleration of
exercise shall be postponed until such liability of the Holder no longer exists.
(c) Certain Events. The Corporation shall not take any action(s)
--------------
as a result of which the Holder would be required to pay an aggregate Exercise
Price greater than the aggregate Exercise Price which such Holder would have had
to pay immediately prior to such action(s).
(d) Notices. Immediately upon any adjustment required pursuant to
-------
the terms of this Section 2, the Corporation shall give written notice thereof
to the Holder, setting forth in reasonable detail and certifying the calculation
of such adjustment. The Corporation shall give written notice to the Holder at
least 20 days prior to the date on which the Corporation closes its books or
establishes a record date (A) with respect to any dividend or distribution upon
Common Stock or (B) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(e) Definitions.
-----------
"Business Day" means any day other than a Saturday, Sunday or
-------------
Page 66 of 84 Pages
other day on which banking institutions are authorized or required by law or
executive order to close in New York, New York.
"Exercise Price" means the Warrant A Exercise Price and the
---------------
Warrant B Exercise Price, or the Warrant B Alternative Exercise Price, as the
case may be.
"Market Price" means the volume-weighted average sales price per
------------
share of Common Stock as reported by Bloomberg Information Systems, Inc. during
a period of 21 days consisting of the day as of which "Market Price" is being
determined and the 20 consecutive Business Days prior to such day. If at any
time shares of the Common Stock are not listed on any securities exchange or
quoted in the NASDAQ System or the over-the-counter market, the "Market Price"
shall be the fair value thereof determined by an investment bank mutually agreed
between the parties. If such parties are unable to reach agreement within a
reasonable period of time, each party will choose and bear the expense of an
investment bank to value the shares of Common Stock and the average of the two
valuations shall be the value.
"Qualified Public Offering" means an underwritten public offering
-------------------------
of Common Stock pursuant to an effective Registration Statement under the
Securities Act of 1933, as then in effect or any comparable statement under any
similar federal statute then in force or effect, pursuant to which at least
1,000,000 shares of Common Stock are sold at a price per share of at least $35
(before underwriting commissions).
Section 3. Expiration of Warrant; Exercise of Warrant.
------------------------------------------
(a) If a Qualified Public Offering has not occurred prior to the
first anniversary of the date hereof (the "First Anniversary"), the portion of
------------------
this Warrant with respect to the Warrant B Amount only shall be automatically
exercised in full; provided, that, with respect to such automatic exercise, the
--------
Holder has the right to elect to receive either the Warrant B Fixed Share Amount
or the Warrant B Variable Share Amount in accordance with Section 1(a)(2).
(b) Subject to paragraph (a) above, the Holder shall have the
right to (A) exercise all or any portion of this Warrant with respect to the
Warrant A Amount at any time and from time to time on or prior to the Expiration
Date and (B) exercise all but not less than all of this Warrant with respect to
the Warrant B Amount at any time during the period commencing on the First
Anniversary and ending on the Expiration Date.
(c) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to (A) the Warrant A Amount and (B)
the Warrant B Amount (only to the extent that the Warrant B Exercise Price paid
by the Holder is not the Warrant B Alternative Exercise Price), in any and all
such cases, by surrendering at the principal office of the Corporation this
Page 67 of 84 Pages
Warrant and a completed Exercise Agreement (in the form of Exhibit I hereto)
and:
(i) paying the applicable Exercise Price by check or wire
transfer to an account designated by the Corporation as to the number of shares
of Common Stock as to which the Warrant is being exercised (the "Exercise
--------
Amount") and receiving in exchange therefor the number of shares of Common Stock
- ------
equal to the Exercise Amount;
(ii) receiving in exchange therefor the number of shares
equal to the product of the Exercise Amount multiplied by a fraction, the
numerator of which is the Market Price less the applicable Exercise Price and
the denominator of which is such Market Price; and/or
(iii) surrendering shares of Common Stock of the Corporation
(valued at the Market Price) equal to the applicable Exercise Price and
receiving in exchange therefor the number of shares of Common Stock equal to the
Exercise Amount.
(d) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to the Warrant B Amount (to the
extent that the Warrant B Exercise Price paid by the Holder is the Warrant B
Alternative Exercise Price) by surrendering at the principal office of the
Corporation this Warrant and a completed Exercise Agreement (in the form of
Exhibit I hereto) and by paying the Warrant B Alternative Exercise Price by
check or wire transfer to an account designated by the Corporation as to the
Exercise Amount and receiving in exchange therefor the number of shares of
Common Stock equal to the Exercise Amount.
(e) A Holder may use one or more of the methods of exercise
outlined in Section 3(c) when exercising this Warrant so long as the completed
Exercise Agreement accurately states which method or methods such Holder intends
to use and the number of shares as to which each such method will be used.
(f) Certificates for shares of Common Stock acquired through
exercise of this Warrant shall be delivered by the Corporation to the Holder
within five (5) Business Days after receipt by the Corporation of the items
required by Sections 3(c) and 3(d) for the respective method or methods of
exercise. Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Corporation shall prepare a new
warrant substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Holder.
(g) The Common Stock issuable upon exercise of this Warrant shall
be deemed to have been issued to the Holder on the date on which the Corporation
Page 68 of 84 Pages
receives the completed Exercise Agreement and payment of the Exercise Price, if
any, and such Holder shall be deemed for all purposes to have become the record
holder of such Common Stock on such date.
(h) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such exercise and the related issuance of shares of Common
Stock.
(i) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as are issuable upon exercise of this Warrant. All such shares of
Common Stock shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance). In addition, prior to the issuance of any Common Stock upon an
exercise of this Warrant, the Corporation shall at its expense use its
reasonable best efforts to procure the listing of such Common Stock which shall
be issued upon exercise of this Warrant as then may be required on all stock
exchanges or interdealer quotation systems on which the Common Stock is then
listed and shall maintain such listing if and so long as any shares of the
Common Stock shall be listed on such stock exchanges or interdealer quotation
systems.
(j) The Corporation shall not be required to issue fractional
shares of Common Stock on the exercise of this Warrant. In the event that the
number of shares of Common Stock calculated pursuant to Section 1 above results
in a fraction, such number shall be rounded down to the nearest whole number.
Notwithstanding the above, fractional shares shall be issued to the extent that
not to do so would result in a material diminution in the aggregate value of the
shares of Common Stock to be received by the Holder in the absence of the
issuance of such fractional shares.
Section 4. Certain Distributions. If, from the date hereof to and
---------------------
including the First Anniversary, the Corporation makes any dividend or other
distribution on its shares of Common Stock or establishes a record date in
respect of any such dividend or distribution (other than a dividend or
distribution covered by Section 2(a) or Section 2(b)), the Holder shall be
entitled to receive, upon exercise of this Warrant, that amount of such dividend
or other distribution which such Holder would have received if this Warrant had
been exercised immediately prior to such record date or dividend or other
distribution, as applicable, and the Corporation shall take all necessary action
to ensure that such amounts are available to be so distributed.
Page 69 of 84 Pages
Section 5. Warrant Transferable. Subject to the transfer
----------------------
conditions referred to in the legend endorsed hereon, this Warrant and all
rights hereunder are transferable, in whole or in part, without charge to the
Holder, upon surrender of this Warrant with a properly executed Assignment (in
the form of Exhibit II hereto) at the principal office of the Corporation.
Section 6. Warrant Exchangeable for Different Denominations. This
------------------------------------------------
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Corporation, for new Warrants ("New Warrants"),
-------------
substantially identical hereto, representing in the aggregate the rights
formerly represented by this Warrant, and each of such New Warrants shall
represent such portion of such rights as is designated by the Holder at the time
of such surrender. The date the Corporation initially issues this Warrant shall
be the date of issuance of such New Warrants regardless of the number of times
new certificates representing the unexpired and unexercised rights formerly
represented by this Warrant shall be issued.
Section 7. Replacement. Upon receipt of an affidavit of the
-----------
Holder as to the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity provided by the Holder, or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate, substantially identical hereto, representing the rights represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.
Section 8. Successors and Assigns. This instrument is intended to
----------------------
bind and inure to the benefit of and be enforceable by the Holder and its
respective heirs, successors and assigns.
Section 9. Amendment and Waiver. Except as otherwise provided
---------------------
herein, the provisions of this Warrant may be amended only if the Corporation
has obtained the written consent of the Holder.
Section 10. Descriptive Headings; Governing Law. The descriptive
------------------------------------
headings of this Warrant are inserted for convenience only and do not constitute
a part of this Warrant. The laws of the State of New York will govern this
Agreement without giving effect to any choice of law or conflict of law
provision or rule.
Section 11. Complete Agreement; Severability. Except as otherwise
--------------------------------
expressly set forth herein, this Warrant, the Purchase Agreement and any other
agreement executed by the parties and contemplated by the Purchase Agreement
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
Whenever possible, each provision of this Warrant will be interpreted in such
Page 70 of 84 Pages
manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Warrant will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
Section 12. Notices. Except as otherwise expressly provided
-------
herein, all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. mail (i) to the Corporation, at its principal executive
offices and (ii) to the Holder, at the address set forth in the Purchase
Agreement with copies to such persons as are indicated therein.
* * * *
Page 71 of 84 Pages
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed and attested by its duly authorized officers and to be dated the date of
issuance hereof.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Date: July 31, 1996 By: /S/ K. PAUL SINGH
-----------------------------
K. Paul Singh
President, Chief Executive Officer
Attest:
- -------------------------
Secretary
Page 72 of 84 Pages
EXHIBIT I
EXERCISE AGREEMENT
-------------------
To: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. PW-__), hereby agrees to exercise the Warrant
as to ____________ shares of Common Stock covered by such Warrant (the "Exercise
Amount") at the Exercise Price provided by such Warrant. The following methods
of exercise will be used respectively for the following number of shares:
Method of Exercise Warrant A Amount Warrant B Amount
being exercised being exercised
Section 3(c)(i)
Section 3(c)(ii)
Section 3(c)(iii)
Section 3(d)
Dated: Signature
---------------------------------------
Address
---------------------------------------
Page 73 of 84 Pages
EXHIBIT II
ASSIGNMENT
----------
FOR VALUE RECEIVED, ________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (Certificate No. PW-__) with respect to the number of shares of
the Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
- ----------------- ------- -------------
Dated: Signature
---------------------------------------
Address
---------------------------------------
Witness
---------------------------------------
Page 74 of 84 Pages
EXHIBIT M
The security represented by this Certificate has
not been registered under the Securities Act of
1933, as amended, or applicable state securities
laws, and may not be transferred or otherwise
disposed of unless it has been registered under
that act or an exemption from registration is
available. The transfer of such secu- rity is
additionally subject to the conditions specified
in the Securityholders' Agreement, dated as of
July 31, 1996 (as amended and modified from time
to time), between the issuer hereof and certain
investors (including the initial holder hereof).
The Corporation reserves the right to refuse the
transfer of such security until such conditions
have been fulfilled with respect to such transfer.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
COMMON STOCK PURCHASE WARRANT
-----------------------------
Certificate No. PW-4
FOR VALUE RECEIVED, Primus Telecommunications Group,
Incorporated, a Delaware corporation (the "Corporation"), hereby grants to
-----------
Winston Partners II LDC or its registered assigns (the "Registered Holder" or
------------------
"Holder") this warrant (the "Warrant") to purchase, in accordance with the terms
------ -------
set forth herein, shares of the Corporation's Common Stock, par value $.01 per
share (the "Common Stock"). This Warrant is issued pursuant to the Securities
-------------
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
-------------------
between, among others, the Corporation and the Holder. Each capitalized term
used in this Warrant which is defined in the Purchase Agreement but not
otherwise defined herein has the meaning given such term in the Purchase
Agreement.
This Warrant is subject to the following provisions:
Section 1. Warrant Terms.
-------------
(a) The Warrant is for the purchase of:
(1) 13,750 shares of Common Stock (the "Warrant A Amount")
----------------
at a price equal to the Warrant A Exercise Price. The "Warrant A
---------
Exercise Price" shall be $.01 per share; and
--------------
(2) shares of Common Stock (the "Warrant B Amount")
------------------
totalling (A) that number of shares having a Market Price of
Page 75 of 84 Pages
$1,375,000 at the time of exercise of this Warrant with respect
to the Warrant B Amount and (B) either, at the Holder's option,
(x) 10,714 shares (the "Warrant B Fixed Share Amount") or (y)
------------------------------
10.763209 shares of Common Stock (the "Warrant B Variable Share
-------------------------
Amount") times the number of days from and including the date
------
hereof until and including the date of exercise of this Warrant
with respect to the Warrant B Amount. If the Holder elects to
receive the Warrant B Variable Share Amount as part of its
exercise of this Warrant with respect to the Warrant B Amount,
then the exercise price (the "Warrant B Exercise Price") to be
-------------------------
paid by the Holder to the Corporation shall be $.01 per share of
the applicable Warrant B Amount. If the Holder elects to receive
the Warrant B Fixed Share Amount as part of its exercise of this
Warrant with respect to the Warrant B Amount, then the Warrant B
Exercise Price to be paid by the Holder to the Corporation shall
be the greater of (A) an amount equal to $.01 per share
multiplied by the number of shares comprising the Warrant B
Amount and (B) an amount (the "Warrant B Alternative Exercise
--------------------------------
Price") equal to $301.37 multiplied by the number of days
-----
remaining from and after the date of exercise of this Warrant
with respect to the Warrant B Amount until and including the
third anniversary of the date hereof (the"Expiration Date").
---------------
Section 2. Anti-dilution Provisions. In order to prevent dilution
------------------------
of the purchase rights granted under Section 1 of this Warrant, the Warrant A
Amount, the Warrant B Fixed Share Amount and the Warrant B Variable Share Amount
shall be subject to adjustment from time to time pursuant to this Section 2. For
the avoidance of doubt and not withstanding anything contained in this Section 2
to the contrary, in no event shall the Warrant B Exercise Price be reduced to an
amount less than $.01 per share.
(a) Subdivision or Combination of Common Stock. If the
------------------------------------------------
Corporation at any time subdivides or combines (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock or makes a distribution on its Common Stock in shares of
its stock other than Common Stock, then the number and kind of shares of capital
stock of the Corporation issuable upon exercise of this Warrant (as in effect
immediately prior to such action) shall be adjusted so, and provisions shall be
made to insure, that the Holder may receive, upon exercise of this Warrant, the
aggregate number and kind of shares of capital stock of the Corporation which
such Holder would have received immediately following such action if this
Warrant had been exercised immediately prior to such action.
(b) Reorganization, Reclassification, Consolidation, Merger or
-------------------------------------------------------------
Sale. Any recapitalization, reorganization, reclassification, consolidation,
- ----
merger, sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock, is referred to herein as an "Organic Change." Prior to the
---------------
Page 76 of 84 Pages
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the Holder) to
insure that the Holder shall thereafter have the right to acquire and receive,
in lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the exercise of this
Warrant, such shares of stock, securities or assets as such Holder would have
received in connection with such Organic Change if such Holder had exercised
this Warrant immediately prior to such Organic Change. In each such case, the
Corporation shall also make appropriate provisions (in form and substance
reasonably satisfactory to the Holder) to insure that the provisions of this
Section 2 shall thereafter be applicable to this Warrant. The Corporation shall
not effect any such Organic Change unless prior to the consummation thereof, the
successor entity (if other than the Corporation) resulting from any such Organic
Change or the entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the Holder), the obligation to
deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
Notwithstanding the above provisions of this paragraph (b), the successor entity
(if other than the Corporation) resulting from any such Organic Change or the
entity purchasing such assets (the "Acquiring Entity") may require that this
-----------------
Warrant be fully exercised as of the date of the consummation of such Organic
Change with the Holder having full rights to receive the consideration offered
to the other securityholders of the Corporation on the basis of such fully
exercised amount as of such date; provided, that if, as a result of such
--------
acceleration of exercise the Holder would have short swing profits under Section
16 of the Securities Exchange Act of 1934, as amended, such acceleration of
exercise shall be postponed until such liability of the Holder no longer exists.
(c) Certain Events. The Corporation shall not take any action(s)
--------------
as a result of which the Holder would be required to pay an aggregate Exercise
Price greater than the aggregate Exercise Price which such Holder would have had
to pay immediately prior to such action(s).
(d) Notices. Immediately upon any adjustment required pursuant to
-------
the terms of this Section 2, the Corporation shall give written notice thereof
to the Holder, setting forth in reasonable detail and certifying the calculation
of such adjustment. The Corporation shall give written notice to the Holder at
least 20 days prior to the date on which the Corporation closes its books or
establishes a record date (A) with respect to any dividend or distribution upon
Common Stock or (B) for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(e) Definitions.
-----------
"Business Day" means any day other than a Saturday, Sunday or
-------------
other day on which banking institutions are authorized or required by law or
executive order to close in New York, New York.
Page 77 of 84 Pages
"Exercise Price" means the Warrant A Exercise Price and the
---------------
Warrant B Exercise Price, or the Warrant B Alternative Exercise Price, as the
case may be.
"Market Price" means the volume-weighted average sales price per
------------
share of Common Stock as reported by Bloomberg Information Systems, Inc. during
a period of 21 days consisting of the day as of which "Market Price" is being
determined and the 20 consecutive Business Days prior to such day. If at any
time shares of the Common Stock are not listed on any securities exchange or
quoted in the NASDAQ System or the over-the-counter market, the "Market Price"
shall be the fair value thereof determined by an investment bank mutually agreed
between the parties. If such parties are unable to reach agreement within a
reasonable period of time, each party will choose and bear the expense of an
investment bank to value the shares of Common Stock and the average of the two
valuations shall be the value.
"Qualified Public Offering" means an underwritten public offering
-------------------------
of Common Stock pursuant to an effective Registration Statement under the
Securities Act of 1933, as then in effect or any comparable statement under any
similar federal statute then in force or effect, pursuant to which at least
1,000,000 shares of Common Stock are sold at a price per share of at least $35
(before underwriting commissions).
Section 3. Expiration of Warrant; Exercise of Warrant.
------------------------------------------
(a) If a Qualified Public Offering has not occurred prior to the
first anniversary of the date hereof (the "First Anniversary"), the portion of
------------------
this Warrant with respect to the Warrant B Amount only shall be automatically
exercised in full; provided, that, with respect to such automatic exercise, the
Holder has the right to elect to receive either the Warrant B Fixed Share Amount
or the Warrant B Variable Share Amount in accordance with Section 1(a)(2).
(b) Subject to paragraph (a) above, the Holder shall have the
right to (A) exercise all or any portion of this Warrant with respect to the
Warrant A Amount at any time and from time to time on or prior to the Expiration
Date and (B) exercise all but not less than all of this Warrant with respect to
the Warrant B Amount at any time during the period commencing on the First
Anniversary and ending on the Expiration Date.
(c) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to (A) the Warrant A Amount and (B)
the Warrant B Amount (only to the extent that the Warrant B Exercise Price paid
by the Holder is not the Warrant B Alternative Exercise Price), in any and all
such cases, by surrendering at the principal office of the Corporation this
Warrant and a completed Exercise Agreement (in the form of Exhibit I hereto)
---------
and:
Page 78 of 84 Pages
(i) paying the applicable Exercise Price by check or wire
transfer to an account designated by the Corporation as to the number of shares
of Common Stock as to which the Warrant is being exercised (the "Exercise
--------
Amount") and receiving in exchange therefor the number of shares of Common Stock
- ------
equal to the Exercise Amount;
(ii) receiving in exchange therefor the number of shares
equal to the product of the Exercise Amount multiplied by a fraction, the
numerator of which is the Market Price less the applicable Exercise Price and
the denominator of which is such Market Price; and/or
(iii) surrendering shares of Common Stock of the Corporation
(valued at the Market Price) equal to the applicable Exercise Price and
receiving in exchange therefor the number of shares of Common Stock equal to the
Exercise Amount.
(d) Subject to paragraph (b) above, the Holder shall have the
right to exercise this Warrant with respect to the Warrant B Amount (to the
extent that the Warrant B Exercise Price paid by the Holder is the Warrant B
Alternative Exercise Price) by surrendering at the principal office of the
Corporation this Warrant and a completed Exercise Agreement (in the form of
Exhibit I hereto) and by paying the Warrant B Alternative Exercise Price by
check or wire transfer to an account designated by the Corporation as to the
Exercise Amount and receiving in exchange therefor the number of shares of
Common Stock equal to the Exercise Amount.
(e) A Holder may use one or more of the methods of exercise
outlined in Section 3(c) when exercising this Warrant so long as the completed
Exercise Agreement accurately states which method or methods such Holder intends
to use and the number of shares as to which each such method will be used.
(f) Certificates for shares of Common Stock acquired through
exercise of this Warrant shall be delivered by the Corporation to the Holder
within five (5) Business Days after receipt by the Corporation of the items
required by Sections 3(c) and 3(d) for the respective method or methods of
exercise. Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Corporation shall prepare a new
warrant substantially identical hereto, representing the rights formerly
represented by this Warrant which have not expired or been exercised and shall,
within such five-day period, deliver such new Warrant to the Holder.
(g) The Common Stock issuable upon exercise of this Warrant shall
be deemed to have been issued to the Holder on the date on which the Corporation
receives the completed Exercise Agreement and payment of the Exercise Price, if
any, and such Holder shall be deemed for all purposes to have become the record
holder of such Common Stock on such date.
Page 79 of 84 Pages
(h) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such exercise and the related issuance of shares of Common
Stock.
(i) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of issuance upon exercise of this Warrant, such number of shares of
Common Stock as are issuable upon exercise of this Warrant. All such shares of
Common Stock shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The Corporation shall
take all such actions as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Corporation upon each such
issuance). In addition, prior to the issuance of any Common Stock upon an
exercise of this Warrant, the Corporation shall at its expense use its
reasonable best efforts to procure the listing of such Common Stock which shall
be issued upon exercise of this Warrant as then may be required on all stock
exchanges or interdealer quotation systems on which the Common Stock is then
listed and shall maintain such listing if and so long as any shares of the
Common Stock shall be listed on such stock exchanges or interdealer quotation
systems.
(j) The Corporation shall not be required to issue fractional
shares of Common Stock on the exercise of this Warrant. In the event that the
number of shares of Common Stock calculated pursuant to Section 1 above results
in a fraction, such number shall be rounded down to the nearest whole number.
Notwithstanding the above, fractional shares shall be issued to the extent that
not to do so would result in a material diminution in the aggregate value of the
shares of Common Stock to be received by the Holder in the absence of the
issuance of such fractional shares.
Section 4. Certain Distributions. If, from the date hereof to and
---------------------
including the First Anniversary, the Corporation makes any dividend or other
distribution on its shares of Common Stock or establishes a record date in
respect of any such dividend or distribution (other than a dividend or
distribution covered by Section 2(a) or Section 2(b)), the Holder shall be
entitled to receive, upon exercise of this Warrant, that amount of such dividend
or other distribution which such Holder would have received if this Warrant had
been exercised immediately prior to such record date or dividend or other
distribution, as applicable, and the Corporation shall take all necessary action
to ensure that such amounts are available to be so distributed.
Section 5. Warrant Transferable. Subject to the transfer
----------------------
conditions referred to in the legend endorsed hereon, this Warrant and all
Page 80 of 84 Pages
rights hereunder are transferable, in whole or in part, without charge to the
Holder, upon surrender of this Warrant with a properly executed Assignment (in
the form of Exhibit II hereto) at the principal office of the Corporation.
Section 6. Warrant Exchangeable for Different Denominations. This
------------------------------------------------
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Corporation, for new Warrants ("New Warrants"),
substantially identical hereto, representing in the aggregate the rights
formerly represented by this Warrant, and each of such New Warrants shall
represent such portion of such rights as is designated by the Holder at the time
of such surrender. The date the Corporation initially issues this Warrant shall
be the date of issuance of such New Warrants regardless of the number of times
new certificates representing the unexpired and unexercised rights formerly
represented by this Warrant shall be issued.
Section 7. Replacement. Upon receipt of an affidavit of the
-----------
Holder as to the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of indemnity provided by the Holder, or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate, substantially identical hereto, representing the rights represented
by such lost, stolen, destroyed or mutilated certificate and dated the date of
such lost, stolen, destroyed or mutilated certificate.
Section 8. Successors and Assigns. This instrument is intended to
----------------------
bind and inure to the benefit of and be enforceable by the Holder and its
respective heirs, successors and assigns.
Section 9. Amendment and Waiver. Except as otherwise provided
---------------------
herein, the provisions of this Warrant may be amended only if the Corporation
has obtained the written consent of the Holder.
Section 10. Descriptive Headings; Governing Law. The descriptive
------------------------------------
headings of this Warrant are inserted for convenience only and do not constitute
a part of this Warrant. The laws of the State of New York will govern this
Agreement without giving effect to any choice of law or conflict of law
provision or rule.
Section 11. Complete Agreement; Severability. Except as otherwise
--------------------------------
expressly set forth herein, this Warrant, the Purchase Agreement and any other
agreement executed by the parties and contemplated by the Purchase Agreement
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
Whenever possible, each provision of this Warrant will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant is held to be invalid, illegal or unenforceable in any respect
Page 81 of 84 Pages
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Warrant will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
Section 12. Notices. Except as otherwise expressly provided
-------
herein, all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or deposited in the U.S. mail (i) to the Corporation, at its principal executive
offices and (ii) to the Holder, at the address set forth in the Purchase
Agreement with copies to such persons as are indicated therein.
* * * *
Page 82 of 84 Pages
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
signed and attested by its duly authorized officers and to be dated the date of
issuance hereof.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Date: July 31, 1996 By: /S/ K. PAUL SINGH
---------------------------------------
K. Paul Singh
President, Chief Executive Officer
Attest:
- ------------------------
Secretary
Page 83 of 84 Pages
EXHIBIT I
EXERCISE AGREEMENT
To: PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. PW-__), hereby agrees to exercise the Warrant
as to ____________ shares of Common Stock covered by such Warrant (the "Exercise
Amount") at the Exercise Price provided by such Warrant. The following methods
of exercise will be used respectively for the following number of shares:
Method of Exercise Warrant A Amount Warrant B Amount
being exercised being exercised
Section 3(c)(i)
Section 3(c)(ii)
Section 3(c)(iii)
Section 3(d)
Dated: Signature
---------------------------------------
Address
---------------------------------------
Page 84 of 84 Pages
EXHIBIT II
ASSIGNMENT
FOR VALUE RECEIVED, ________________________________ hereby
sells, assigns and transfers all of the rights of the undersigned under the
attached Warrant (Certificate No. PW-__) with respect to the number of shares of
the Common Stock covered thereby set forth below, unto:
Names of Assignee Address No. of Shares
- ----------------- ------- -------------
Dated: Signature
---------------------------------------
Address
---------------------------------------
Witness
---------------------------------------