<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No.______)/1/
TresCom International, Inc.
________________________________________________________________________________
(Name of Issuer)
Common Stock, par value $.0419 per share
________________________________________________________________________________
(Title of Class of Securities)
895307 10 6
________________________________________________________________________________
(CUSIP Number)
Primus Telecommunications Group, Incorporated
1700 Old Meadow Rd.
McLean, VA 22102
(703) 902-2800
________________________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 3, 1998
________________________________________________________________________________
(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 [_].
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.
__________
(1) 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 disclosures 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).
Page 1 of 6 Pages
<PAGE>
SCHEDULE 31D
- ----------------------- ---------------------
CUSIP NO. 895307 10 6 PAGE 2 OF 6 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Primus Telecommunications Group, Incorporated
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS* OO
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
6,570,095 Shares
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY N/A
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
N/A
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
N/A
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,570,095 Shares
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.2%
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
Page 2 of 6 Pages
<PAGE>
SCHEDULE 13D STATEMENT
----------------------
ITEM 1 SECURITY AND ISSUER:
--------------------
This statement relates to shares of Common Stock (the "Common
Stock"), par value $.0419 per share, of TresCom International, Inc. (the
"Issuer"), a Florida corporation. The principal place of business of the Issuer
is located at 200 East Broward Boulevard, Fort Lauderdale, Florida 33301.
ITEM 2. IDENTITY AND BACKGROUND:
------------------------
(A) This statement is being filed by Primus Telecommunications Group,
Incorporated, a Delaware corporation ("Primus"). The persons listed on Schedule
A annexed hereto are the executive officers and directors of Primus. Neither
Primus nor the persons listed in Schedule A constitute a "group" within the
meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, as
amended.
(B) The principal business address of Primus is 1700 Old Meadow Road,
McLean, VA 22102. Schedule A sets forth the business address and present
principal occupation or employment of each of the officers and directors of
Primus.
(C) Primus is engaged in the business of providing telecommunications
services.
(D) During the past five years, neither Primus nor the persons listed on
Schedule A have been convicted in a criminal proceeding, excluding traffic
violations or similar misdemeanors.
(E) During the past five years, neither Primus nor the persons listed on
Schedule A have been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which proceeding
such person was or is 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.
(F) Schedule A sets forth the citizenship of each officer and director of
Primus.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
--------------------------------------------------
On February 3, 1998, Primus, Taurus Acquisition Corporation, a
Florida corporation and a wholly-owned subsidiary of Primus ("TAC"), and the
Issuer, entered into an Agreement and Plan of Merger (the "Merger Agreement"),
which provides, among
Page 3 of 6 Pages
<PAGE>
other things, for the merger (the "Merger") of TAC with and into the Issuer. In
connection therewith, Primus entered into two voting agreements (the "Voting
Agreements") and one stockholder agreement (the "Stockholder Agreement", and
collectively with the Voting Agreements, the "Agreements") with certain
stockholders of the Issuer, pursuant to which such stockholders agreed, among
other things, to vote the shares of Common Stock beneficially owned by them in
favor of the Merger and against any actions or agreements that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Issuer under the Merger Agreement. The Agreements also granted
to Primus an irrevocable proxy (which is coupled with an interest in the shares)
to vote the shares of Common Stock beneficially owned by such shareholder in
accordance with the terms of the Agreements. The first of the Voting Agreements
was with Wesley T. O'Brien, and the second was with Rudolph McGlashan. The
Stockholder Agreement was with Warburg, Pincus Investors, LP ("Warburg,
Pincus"). Under the terms of the Merger Agreement, the Issuer's stockholders
will receive shares of Primus's common stock in exchange for the Issuer's common
stock held by the such stockholders at the effective time of the Merger. The
Voting Agreements and the Stockholder Agreement were entered into by the
applicable stockholders to induce Primus to enter into the Merger Agreement and
to effect the Merger.
ITEM 4. PURPOSE OF TRANSACTION.
-----------------------
The purpose of the Agreements was to induce Primus to enter into
the Merger Agreement and to effect the Merger, as described in Item 3 above.
Upon completion of the Merger, the Issuer will be the surviving corporation and
a wholly-owned subsidiary of Primus, all outstanding shares of the Issuer (other
than shares owned by Primus and its affiliates) will be converted into shares of
Primus, the officers and directors of TAC will become the officers and directors
of the Issuer and the Issuer's shares will be delisted from the Nasdaq National
Market. Other than pursuant to the Merger Agreement, neither Primus nor any of
the persons listed on Schedule A has any plans which relate to or would result
in any of the transactions described in subsections (a) through (j) inclusive,
of Item 4 of Schedule 13D.
ITEM 5 INTEREST IN SECURITIES OF THE ISSUER
------------------------------------
(A) As of February 3, 1998, Primus beneficially owns 6,570,095 shares or
approximately 54.2% of the outstanding Common Stock.
(B) Primus has the shared power to vote the shares.
(C) Not applicable.
Page 4 of 6 Pages
<PAGE>
(D) Not applicable.
(E) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
------------------------------------------------------
The Voting Agreements with Mr. McGlashan and Mr. O'Brien (the
"Shareholders") and the Stockholder Agreement with Warburg, Pincus provide that,
among other things, at any meeting of the stockholders of the Issuer, however
called, and in any action by consent of the stockholders of the Issuer, the
Shareholders and Warburg, Pincus shall: (a) vote their shares of Common Stock
in favor of the Merger; (b) vote their shares of Common Stock against any action
or agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Issuer under the Merger
Agreement; (c) vote their shares of Common Stock against any action or agreement
that would impede, interfere with, delay, postpone or attempt to discourage the
Merger including, but not limited to, (i) any extraordinary corporate
transaction (other than the Merger), such as a merger, other business
combination, reorganization or liquidation involving the Issuer, (ii) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries, (iii) any change in the management or board of directors of the
Issuer, except as otherwise agreed to in writing by Primus, (iv) any material
change in the present capitalization of the Issuer, or (v) any other material
change in the corporate structure or business of the Issuer; and, (d) without
limiting the foregoing, consult with Primus prior to any such vote and vote such
shares of common stock in such manner as is determined by Primus to be in
compliance with the provisions set forth above. The Shareholders and Warburg,
Pincus granted to Primus an irrevocable proxy to vote their shares of Common
Stock in accordance with the terms and conditions of the Agreements.
Notwithstanding the foregoing (and subject to certain additional rights held by
the Shareholders as set forth in the Agreements), the proxies and the
obligations referred to above shall terminate when the Agreements terminate.
The Agreements shall terminate on the earliest of (a) the effective time of the
Merger, (b) the date immediately following the termination of the Merger
Agreement in accordance with its terms and (c) October 31, 1998.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
1. Agreement and Plan of Merger by and among Primus, TAC, and the
Issuer, entered into February 3, 1998.
Page 5 of 6 Pages
<PAGE>
2. Stockholder Agreement by and among Primus, TAC, K. Paul Singh and
Warburg, Pincus, dated as of February 3, 1998.
3. Voting Agreement by and between Primus and Wesley T. O'Brien,
dated as of February 3, 1998.
4. Voting Agreement by and between Primus and Rudy McGlashan, dated
as of February 3, 1998.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
/s/ Neil L. Hazard
March 11, 1998 By: _________________________________
Neil L. Hazard,
Executive Vice President
Page 6 of 6 Pages
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
NAME CITIZEN-SHIP POSITION WITH PRESENT
PRIMUS PRINCIPAL
OCCUPATION
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
K. Paul Singh United Chairman of President of
c/o Primus States of the Board, Primus
Telecommunications America Chief
Group, Inc. Executive
1700 Old Meadow Rd. Officer and
McLean, VA 22102 President
- ------------------------------------------------------------------------------
Neil L Hazard United Executive Chief
c/o Primus States of Vice Financial
Telecommunications America President and Officer of
Group, Inc. Chief Primus
1700 Old Meadow Rd. Financial
McLean, VA 22102 Officer
- ------------------------------------------------------------------------------
John F. DePodesta United Executive Executive Vice
c/o Primus States of Vice President of
Telecommunications America President -- Primus
Group, Inc. Law and
1700 Old Meadow Rd. Regulatory
McLean, VA 22102 Affairs and
Director
- ------------------------------------------------------------------------------
John Melick United Vice Vice President
c/o Primus States of President of of Primus
Telecommunications America International
Group, Inc. Business
1700 Old Meadow Rd. Development
McLean, VA 22102
- ------------------------------------------------------------------------------
Ravi Bhatia Australia Chief Chief
c/o Primus Operating Operating
Telecommunications Officer of Officer of
Pty, Ltd. Primus Primus
55 King Street Telecommunica Australia,
Melbourne, Victoria, tions Pty, c/o Primus
Australia Ltd., a Telecommunicat
wholly owned ions Pty, Ltd.
subsidiary of 55 King Street
Primus Melbourne,
Victoria,
Australia
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
NAME CITIZEN-SHIP POSITION WITH PRESENT
PRIMUS PRINCIPAL
OCCUPATION
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Yousef Javadi United Chief President and
c/o Primus States of Operating Chief
Telecommunications America Officer of Operating
Group, Inc. Primus Officer of
1700 Old Meadow Rd. Telecommunica Primus
McLean, VA 22102 tions, Inc., Telecommunicat
a wholly ions, Inc.
owned 1700 Old
subsidiary of Meadow Rd.
Primus McLean, VA
22102
- ------------------------------------------------------------------------------
Herman Fialkov United Director Director of
c/o Primus States of Primus
Telecommunications America
Group, Inc.
1700 Old Meadow Rd.
McLean, VA 22102
- ------------------------------------------------------------------------------
David E. Hershberg United Director Director of
c/o Primus States of Primus
Telecommunications America
Group, Inc.
1700 Old Meadow Rd.
McLean, VA 22102
- ------------------------------------------------------------------------------
John Puente United Director Director of
c/o Primus States of Primus
Telecommunications America
Group, Inc.
1700 Old Meadow Rd.
McLean, VA 22102
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 1
---------
AGREEMENT AND PLAN OF MERGER
----------------------------
Agreement and Plan of Merger (the "Agreement") entered into as of February
---------
3, 1998, by and among Primus Telecommunications Group, Inc., a Delaware
corporation (the "Purchaser"), Taurus Acquisition Corporation, a Florida
---------
corporation and a wholly-owned Subsidiary of the Purchaser (the "Purchaser
---------
Subsidiary"), and TresCom International, Inc., a Florida corporation (the
- ----------
"Target"). The Purchaser, the Purchaser Subsidiary and the Target are referred
------
to collectively herein as the "Parties."
-------
WITNESSETH:
-----------
WHEREAS, this Agreement contemplates a transaction in which the Purchaser
will acquire all of the outstanding capital stock of the Target through a merger
of the Purchaser Subsidiary with and into the Target.
WHEREAS, each Board of Directors of the Purchaser, the Purchaser Subsidiary
and the Target has approved the acquisition of the Target by the Purchaser,
including the merger of the Purchaser Subsidiary with and into the Target (the
"Merger"), upon the terms and subject to the conditions set forth herein;
------
WHEREAS, the Board of Directors of the Target has determined that the
Merger is fair to and in the best interests of the holders of the Target's
common stock, par value $0.0419 per share (the "Target Shares"), and has
-------------
resolved to recommend the acceptance and approval of the Merger by the Target
Stockholders (as defined in (S)1 below);
WHEREAS, the Board of Directors of the Purchaser has determined that the
Merger is fair to and in the best interests of the holders of the Purchaser's
common stock, par value $0.01 per share (the "Purchaser Shares"), and has
----------------
resolved to recommend the acceptance and approval of the Merger by the Purchaser
Stockholders (as defined in (S)1 below);
WHEREAS, to induce the Purchaser and the Purchaser Subsidiary to enter into
this Agreement, the Purchaser, the Purchaser Subsidiary and K. Paul Singh, the
Chairman of the Board and Chief Executive Officer of the Purchaser, have entered
into a Stockholder Agreement (the "Stockholder Agreement") with Warburg, Pincus,
---------------------
Investors, L.P. (the "Stockholder") pursuant to which the Stockholder, among
other things, has agreed to vote its Target Shares in favor of the Merger and
has granted the Purchaser Subsidiary an option to purchase certain Target Shares
beneficially owned by the Stockholder, the Purchaser has agreed to grant certain
registration rights to the Stockholder, and the Purchaser's Chief Executive
Officer has granted certain other rights to the Stockholder, all upon the terms
and subject to the conditions set forth in the Stockholder Agreement;
WHEREAS, to induce the Purchaser and the Purchaser Subsidiary on the one
hand, and the Target on the other hand, to enter into this Agreement, certain
other stockholders of the Target and the Purchaser, respectively, have entered
into voting agreements, pursuant to which such stockholders, among other things,
have agreed to vote their shares in favor of the Merger, all upon the terms and
subject to the conditions set forth in said agreements;
<PAGE>
WHEREAS, this Agreement contemplates a tax-free merger of the Purchaser
Subsidiary with and into the Target in a reorganization pursuant to Code
(S)368(a)(2)(E), and the Target Stockholders will receive capital stock in the
Purchaser in exchange for their capital stock in the Target;
NOW, THEREFORE, in consideration of the premises and the mutual promises
set forth herein, and in consideration of the representations, warranties and
covenants set forth herein, the Parties agree as follows:
1. Definitions.
-----------
"Acquisition Proposal" means any proposal or offer (including, without
--------------------
limitation, any proposal or offer to Target Stockholders) with respect to a
merger, acquisition, consolidation, recapitalization, reorganization, tender
offer or exchange offer or similar transaction involving, or any purchase of all
or any significant portion of the assets of, or any equity interest representing
25% or more of the outstanding Target Shares in, the Target or any of its
material Subsidiaries.
"Additional Consideration" has the meaning set forth in (S)7(a)(vi)
------------------------
below.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
---------
promulgated under the Securities Exchange Act; provided, however, in the case of
-------- -------
the Target or the Stockholder, (i) no portfolio company of the Stockholder or of
any related venture fund, (ii) no representative or employee of the Stockholder
or of any related venture fund serving as a member of the board of directors on
any such portfolio company, and (iii) no registered broker-dealer or any other
Affiliated entity of Stockholder that is a registered investment adviser, as
well as certain registered investment companies that may be deemed to be
Affiliates of the Stockholder, shall be considered an Affiliate of the Target or
the Stockholder for purposes of this Agreement.
"Agreement" has the meaning set forth in the preambles.
---------
"Articles of Merger" has the meaning set forth in (S)2(c) below.
------------------
"Benefit Plan" and "Benefit Plans" has the meaning set forth in
------------ -------------
(S)3(m)(i).
"Blue Sky Filings" has the meaning set forth in (S)5(c)(i).
----------------
"Closing" has the meaning set forth in (S)2(b) below.
-------
"Closing Date" has the meaning set forth in (S)2(b) below.
------------
"Code" has the meaning set forth in (S)3(m)(ii).
----
"Common Stock" has the meaning set forth in the preambles.
------------
"Confidentiality Agreement" means the letter agreement dated March 21,
-------------------------
1997 between the Purchaser and The Robinson-Humphrey Company, Inc., as
representative of the Target,
-2-
<PAGE>
providing that, among other things, each Party would maintain confidential
certain information of the other Party.
"Confidential Information" means Confidential Evaluation Material, as
------------------------
defined in the Confidentiality Agreement.
"Delaware General Corporation Law" means Title 8, Chapter 1 of the
--------------------------------
Delaware Code, as amended.
"Effective Time" has the meaning set forth in (S)2(d)(i) below.
--------------
"Employees" has the meaning set forth in (S)3(m)(i.
---------
"ERISA" has the meaning set forth in (S)3(m)(i.
-----
"ERISA Affiliate" has the meaning set forth in (S)3(m)(iii).
---------------
"Exchange Agent" has the meaning set forth in (S)2(e)(i).
--------------
"Exchange Fund" has the meaning set forth in (S)2(e)(i).
-------------
"Exchange Ratio" has the meaning set forth in (S)2(d)(v).
--------------
"Florida Business Corporation Law" means the Florida Business
--------------------------------
Corporation Act, as amended.
"GAAP" means United States generally accepted accounting principles as
----
in effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
---------------------
Improvements Act of 1976, as amended.
"Indemnified Party" has the meaning set forth in (S)5(h)(ii) below.
-----------------
"Joint Proxy Statement/Prospectus" has the meaning set forth in
--------------------------------
(S)5(c)(i) below.
"Merger" has the meaning set forth in the preambles.
------
"Nasdaq" has the meaning set forth in (S)5(c)(ii) below.
------
"Order" has the meaning set forth in (S)6(a)(v) below.
-----
"Outstanding Debt" has the meaning set forth in (S)5(d)(iv) below.
----------------
"Party" has the meaning set forth in the preambles.
-----
-3-
<PAGE>
"Pension Plan" has the meaning set forth in (S)3(m)(ii).
------------
"Person" means an individual, a partnership, a corporation, a limited
------
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity (or any
department, agency or political subdivision thereof).
"Per Share Merger Consideration" has the meaning set forth in
------------------------------
(S)2(d)(v) below.
"Potential Buyer" has the meaning set forth in (S) 5(g) below.
---------------
"Purchase Warrant" means that certain warrant to purchase Target
----------------
Shares issued to the Stockholder and dated October 2, 1995.
"Purchaser" has the meaning set forth in the preambles.
---------
"Purchaser 10-K" has the meaning set forth in (S)4(f) below.
--------------
"Purchaser 10-Q" has the meaning set forth in (S)4(f) below.
--------------
"Purchaser Board" means the board of directors of the Purchaser.
---------------
"Purchaser Companies" means the Purchaser, the Purchaser Subsidiary
-------------------
and any of their respective Affiliates.
"Purchaser Disclosure Letter" has the meaning set forth in (S)4(a)
---------------------------
below.
"Purchaser Fairness Opinion" means an opinion of BT Alex. Brown
--------------------------
Incorporated, addressed to the Purchaser Board, as to the fairness of the Merger
to the Purchaser from a financial point of view.
"Purchaser Reports" has the meaning set forth in (S)4(e) below.
-----------------
"Purchaser Shares" has the meaning set forth in the preambles.
----------------
"Purchaser Special Meeting" has the meaning set forth in (S)5(c)(ii)
-------------------------
below.
"Purchaser Stockholder" means any Person who or which holds any
---------------------
Purchaser Shares.
"Purchaser Subsidiary" has the meaning set forth in the preambles.
--------------------
"Purchaser-owned Share" means any Target Share that is beneficially
---------------------
owned by any Purchaser Company.
"Purchaser's Most Recent Audited Fiscal Year End" has the meaning set
-----------------------------------------------
forth in (S)4(f) below.
-4-
<PAGE>
"Registration Statement" has the meaning set forth in (S)5(c)(i)
----------------------
below.
"Requisite Stockholder Approval" means, with respect to the Target,
------------------------------
the affirmative vote of the holders of a majority of the outstanding Target
Shares in favor of this Agreement and the Merger in accordance with the Florida
Business Corporation Law, or, with respect to the Purchaser, the affirmative
vote of the holders of a majority of the outstanding Purchaser Shares in favor
of this Agreement and the Merger in accordance with the Delaware General
Corporation Law.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
-----------------------
as amended, and the rules and regulations promulgated thereunder.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
-----------------
charge or other security interest, other than (a) mechanic's, materialman's and
----------
similar liens; (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings; (c)
purchase money liens and liens securing rental payments under capital lease
arrangements; and (d) other liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money.
"Stock Rights" means each option, warrant, purchase right,
------------
subscription right, conversion right, exchange right or other contract,
commitment or security providing for the issuance or sale of any capital stock,
or otherwise causing to become outstanding any capital stock.
"Stockholder" has the meaning set forth in the preambles.
-----------
"Stockholder Agreement" has the meaning set forth in the preambles.
---------------------
"Subsidiary" means any corporation with respect to which a specified
----------
Person (or a Subsidiary thereof) owns a majority of the voting stock or
otherwise has the power to vote or direct the voting of sufficient securities to
elect a majority of the directors.
"Surviving Corporation" has the meaning set forth in (S)2(a) below.
---------------------
"Target" has the meaning set forth in the preambles.
------
"Target 10-K" has the meaning set forth in (S)3(f) below.
-----------
"Target 10-Q" has the meaning set forth in (S)3(f) below.
-----------
"Target Board" means the board of directors of the Target.
------------
-5-
<PAGE>
"Target Disclosure Letter" has the meaning set forth in (S)3(a) below.
------------------------
"Target Fairness Opinion" means an opinion of The Robinson-Humphrey
-----------------------
Company, Inc., addressed to the Target Board, as to the fairness of the Merger
to the Target Stockholders from a financial point of view.
"Target Reports" has the meaning set forth in (S)3(e) below.
--------------
"Target Shares" has the meaning set forth in the preambles.
-------------
"Target Special Meeting" has the meaning set forth in (S)5(c)(ii)
----------------------
below.
"Target Stockholder" means any Person who or which holds any Target
------------------
Shares.
"Target's Most Recent Audited Fiscal Year End" has the meaning set
--------------------------------------------
forth in (S)3(f) below.
"Tax Return" means any report, return, declaration or other
----------
information required to be supplied to a taxing authority in connection with
Taxes.
"Taxes" means all taxes or other like assessments including, without
-----
limitation, income, withholding, gross receipts, excise, real or personal
property, asset, sales, use, license, payroll, transaction, capital, net worth
and franchise taxes imposed by or payable to any federal, state, county, local
or foreign government, taxing authority, subdivision or agency thereof,
including interest, penalties, additions to tax or additional amounts thereto.
"Valuation Period" has the meaning set forth in (S)2(d)(v) below.
----------------
"Weighted Average Sales Price of a Purchaser Share" has the meaning
-------------------------------------------------
set forth in (S)2(d)(v) below.
2. The Transaction.
---------------
(a) The Merger. On and subject to the terms and conditions of
----------
this Agreement, the Purchaser Subsidiary will merge with and into the Target at
the Effective Time. The Target shall be the corporation surviving the Merger
(the "Surviving Corporation").
---------------------
(b) The Closing. The closing of the transactions contemplated by
-----------
this Agreement (the "Closing") shall take place at the offices of Kelley Drye &
-------
Warren LLP, 101 Park Avenue, New York, New York, commencing at 9:00 a.m. local
time on the third business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Parties may mutually determine (the "Closing Date").
------------
-6-
<PAGE>
(c) Actions at the Closing. At the Closing, (i) the Target will
----------------------
deliver to the Purchaser and the Purchaser Subsidiary the various certificates,
instruments and documents referred to in (S)6(a) below; (ii) the Purchaser and
the Purchaser Subsidiary will deliver to the Target the various certificates,
instruments and documents referred to in (S)6(b) below; (iii) the Target and the
Purchaser Subsidiary will file with the Department of State of the State of
Florida Articles of Merger in the form attached hereto as Exhibit A (the
"Articles of Merger"); and (iv) the Purchaser will deliver the Exchange Fund to
------------------
the Exchange Agent in the manner provided below in this (S)2.
(d) Effect of Merger.
----------------
(i) General. The Merger shall become effective at the
-------
time (the "Effective Time") the Target and the Purchaser Subsidiary file the
--------------
Articles of Merger with the Department of State of the State of Florida. The
Merger shall have the effect set forth in the Florida Business Corporation Law.
The Surviving Corporation may, at any time after the Effective Time, take any
action (including executing and delivering any document) in the name and on
behalf of either the Target or the Purchaser Subsidiary in order to carry out
and effectuate the transactions contemplated by this Agreement.
(ii) Articles of Incorporation. The Articles of
-------------------------
Incorporation of the Surviving Corporation shall be the Articles of
Incorporation of the Purchaser Subsidiary, except that its name shall be
changed to TresCom International, Inc..
(iii) Bylaws. The Bylaws of the Surviving Corporation
------
shall be amended and restated at and as of the Effective Time to read as did the
Bylaws of the Purchaser Subsidiary immediately prior to the Effective Time
(except that the name of the Surviving Corporation will be TresCom
International, Inc.).
(iv) Directors and Officers. The directors and officers
----------------------
of the Purchaser Subsidiary shall become the directors and officers of the
Surviving Corporation at and as of the Effective Time (retaining their
respective positions and terms of office).
(v) Conversion of Target Shares. At and as of the
---------------------------
Effective Time, (A) each issued and outstanding Target Share (other than any
Purchaser-owned Shares) shall be converted into the right to receive the Per
Share Merger Consideration, and all such Target Shares shall no longer be
outstanding, shall be canceled and retired, shall cease to exist, and each
holder of a certificate representing any such Target Shares shall thereafter
cease to have any rights with respect to such Target Shares, except the right to
receive the Per Share Merger Consideration for such Target Shares upon the
surrender of such certificate in accordance with (S)2(e) below, and (B) each
Purchaser-owned Share and each Target Share held in the treasury of the Target
or by any Subsidiary of the Target shall be canceled without payment therefor;
provided, however, that the Per Share Merger Consideration shall be subject to
- -----------------
proportionate adjustment in the event of any stock split, stock dividend or
reverse stock split. No Target Share shall be deemed to be outstanding or to
have any rights other than those set forth above in this (S)2(d)(v) after the
Effective Time. As used herein, the term "Per Share Merger Consideration" shall
------------------------------
mean that number of Purchaser Shares determined
-7-
<PAGE>
by applying to each Target Share an exchange ratio (the "Exchange Ratio")
--------------
determined as follows: In the event that the Weighted Average Sales Price of a
Purchaser Share as of the Closing Date is greater than or equal to $15.8905, the
Exchange Ratio shall be the quotient of $10.00 divided by the Weighted Average
Sales Price of a Purchaser Share as of the Closing Date; and (B) in the event
that the Weighted Average Sales Price of a Purchaser Share as of the Closing
Date is less than $15.8905, the Exchange Ratio shall be 0.6293, provided,
--------
however, that in the event that the Weighted Average Sales Price of a Purchaser
- -------
Share as of the Closing Date is less than $14.0210, the Target shall have
certain termination rights as set forth in (S)7(a)(vi), subject to the rights of
the Purchaser to override such termination as set forth in such (S)7(a)(vi).
Notwithstanding anything in this (S)2(d)(v), no fractional Purchaser Shares
shall be issued to holders of Target Shares. In lieu thereof, each holder of
shares of Target Shares who would otherwise have been entitled to receive a
fraction of a Purchaser Share (after taking into account all certificates
delivered by such holder at any one time) shall receive an amount in cash equal
to such fraction of a Purchaser Share, multiplied by the Weighted Average Sales
Price of a Purchaser Share as of the Closing Date. "Weighted Average Sales Price
----------------------------
of a Purchaser Share" means the volume-weighted average sales price per
- --------------------
Purchaser Share as reported by Bloomberg Information Systems, Inc. during a
period consisting of the third Nasdaq trading day prior to the date as of which
the Weighted Average Sales Price of a Purchaser Share is being determined and
the nineteen (19) consecutive trading days prior to such day (the "Valuation
---------
Period").
- ------
(vi) Conversion of Stock Rights. At the Effective Time,
--------------------------
each Stock Right granted by the Target to purchase Target Shares which is
outstanding and unexercised immediately prior thereto (whether or not vested or
exercisable), other than the Purchase Warrant, shall be converted automatically
into an option to purchase Purchaser Shares in an amount and at an exercise
price determined as follows:
(x) The number of Purchaser Shares to be subject to the new option shall be
equal to the product of the number of Target Shares subject to the original
Stock Right multiplied by the Exchange Ratio, provided that any fractional
Purchaser Shares resulting from such multiplication shall be rounded up to
the next whole share; and
(y) The exercise price per Purchaser Share under the new option shall be
equal to the quotient of the exercise price per Target Share under the
original Stock Right divided by the Exchange Ratio, provided that the
exercise price resulting from such division shall be rounded up to the next
whole cent.
The adjustment provided herein with respect to any original Stock Rights which
are "incentive stock options" (as defined in Section 422 of the Code) shall be
and are intended to be effected in a manner which is consistent with Section
424(a) of the Code. The option plan of the Target under which the original
Stock Rights were issued shall be assumed by the Purchaser, and the duration and
other terms of the new option shall be the same as the original Stock Right,
except that all references to the Target shall be deemed to be references to the
Purchaser. At the Effective Time, the Purchaser shall deliver to holders of
original Stock Rights appropriate option agreements representing the right to
acquire Purchaser Shares on the terms and conditions set forth in this Section
2(d)(vi).
-8-
<PAGE>
The Purchaser shall take all corporate action necessary to reserve for
issuance a sufficient number of Purchaser Shares for delivery upon exercise of
the new options in accordance with this Section 2(d)(vi). The Purchaser shall
file a registration statement on Form S-8 (or any successor form) or another
appropriate form, effective promptly after the Effective Time, with respect to
Purchaser Shares subject to the new options and shall use all reasonable efforts
to maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding. With respect
to those individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Securities Exchange Act, the
Purchaser shall administer the option plans assumed pursuant to this Section
2(d)(vi) in a manner that complies with rule 16b-3 promulgated under the
Securities Exchange Act to the extent the Target option plan complied with such
rule prior to the Merger.
(vii) Conversion of Capital Stock of the Purchaser
--------------------------------------------
Subsidiary. At and as of the Effective Time, each share of common stock, $.01
- ----------
par value per share, of the Purchaser Subsidiary shall be converted into one
share of common stock, $.01 par value per share, of the Surviving Corporation.
(e) Procedure for Exchange.
----------------------
(i) Immediately after the Effective Time, (A) the
Purchaser will furnish to StockTrans, Inc., its transfer agent, or such bank or
trust company reasonably acceptable to Target, to act as exchange agent (the
"Exchange Agent") a corpus (the "Exchange Fund") consisting of Purchaser Shares
-------------- -------------
and cash sufficient to permit the Exchange Agent to make full payment of the Per
Share Merger Consideration to the holders of all of the issued and outstanding
Target Shares (other than any Purchaser-owned Shares), and (B) the Purchaser
will cause the Exchange Agent to mail a letter of transmittal (with instructions
for its use) in the form to be mutually agreed upon by the Target and the
Purchaser to each holder of issued and outstanding Target Shares (other than any
Purchaser-owned Shares) for the holder to use in surrendering the certificates
which represented his or its Target Shares against payment of the Per Share
Merger Consideration. Upon surrender to the Exchange Agent of such certificates,
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, the Surviving Corporation shall
promptly cause to be issued a certificate representing that number of whole
Purchaser Shares and a check representing the amount of cash in lieu of any
fractional shares and unpaid dividends and distributions, if any, to which such
Persons are entitled, after giving effect to any required tax withholdings. No
interest will be paid or accrued on the cash in lieu of fractional shares and
unpaid dividends and distributions, if any, payable to recipients of Purchaser
Shares. If payment is to be made to a Person other than the registered holder
of the certificate surrendered, it shall be a condition of such payment that the
certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a Person other than
the registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation or the Exchange Agent that such tax
has been paid or is not applicable. In the event any certificate representing
Shares shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed, the Exchange Agent will
-9-
<PAGE>
issue in exchange for such lost, stolen or destroyed certificate the Per Share
Merger Consideration deliverable in respect thereof; provided, however, the
-------- -------
Person to whom the Per Share Merger Consideration is paid shall, as a condition
precedent to the payment thereof, give the Surviving Corporation a bond in such
sum as it may direct or otherwise indemnify the Surviving Corporation in a
manner satisfactory to it against any claim that may be made against the
Surviving Corporation with respect to the certificate alleged to have been lost,
stolen or destroyed. No dividends or other distributions declared after the
Effective Time with respect to Purchaser Shares and payable to the holders of
record thereof shall be paid to the holder of any unsurrendered certificate
until the holder thereof shall surrender such certificate in accordance with
this (S)2(e). After the surrender of a certificate in accordance with this
(S)2(e), the record holder thereof shall be entitled to receive any such
dividends or other distributions, without any interest thereon, which
theretofore had become payable with respect to the Purchaser Shares represented
by such certificate. No holder of an unsurrendered certificate shall be
entitled, until the surrender of such certificate, to vote the Purchaser Shares
into which his Target Shares shall have been converted.
(ii) The Target will cause its transfer agent to furnish
promptly to the Purchaser Subsidiary a list, as of a recent date, of the record
holders of Target Shares and their addresses, as well as mailing labels
containing the names and addresses of all record holders of Target Shares and
lists of security positions of Target Shares held in stock depositories. The
Target will furnish the Purchaser Subsidiary with such additional information
(including, but not limited to, updated lists of holders of Target Shares and
their addresses, mailing labels and lists of security positions) and such other
assistance as the Purchaser or the Purchaser Subsidiary or their agents may
reasonably request.
(iii) The Purchaser may cause the Exchange Agent to invest
the cash included in the Exchange Fund in one or more investments selected by
the Purchaser; provided, however, that the terms and conditions of the
-----------------
investments shall be such as to permit the Exchange Agent to make prompt payment
of the Per Share Merger Consideration as necessary. The Purchaser may cause the
Exchange Agent to pay over to the Surviving Corporation any net earnings with
respect to the investments, and the Purchaser will replace promptly any portion
of the Exchange Fund which the Exchange Agent loses through investments.
(iv) The Purchaser may cause the Exchange Agent to pay
over to the Surviving Corporation any portion of the Exchange Fund (including
any earnings thereon) remaining 180 days after the Effective Time, and
thereafter all former stockholders of the Target shall be entitled to look to
the Surviving Corporation (subject to abandoned property, escheat and other
similar laws) as general creditors thereof with respect to the cash payable upon
surrender of their certificates.
(v) The Purchaser shall pay, or shall cause the Surviving
Corporation to pay, all charges and expenses of the Exchange Agent.
(f) Closing of Transfer Records. After the Effective Time, no
---------------------------
transfer of Target Shares outstanding prior to the Effective Time shall be made
on the stock transfer books of the Surviving Corporation. If, after the
Effective Time, certificates representing such shares are
-10-
<PAGE>
presented for transfer to the Exchange Agent, they shall be canceled and
exchanged for certificates representing Purchaser Shares and cash in lieu of
fractional shares, if any, as provided in (S)2(e).
3. Representations and Warranties of the Target. The Target
--------------------------------------------
represents and warrants to the Purchaser and the Purchaser Subsidiary that the
statements contained in this (S)3 are true and correct as of the date of this
Agreement.
(a) Organization, Qualification and Corporate Power. Each of
-----------------------------------------------
the Target and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Target and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the business,
financial condition or results of operations of the Target and its Subsidiaries
taken as a whole or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. Each of the Target and its Subsidiaries has full
corporate power and corporate authority, and all material foreign, federal and
state governmental permits, licenses and consents, to carry on the businesses in
which it is engaged and to own and use the properties owned and used by it. The
Target does not own any equity interest in any corporation or other entity other
than the Subsidiaries listed in (S)3(a) of the Target Disclosure Letter
accompanying this Agreement (the "Target Disclosure Letter").
------------------------
(b) Capitalization. The entire authorized capital stock of the
--------------
Target consists of 1,000,000 shares of preferred stock, $.01 par value per
share, none of which are issued and outstanding, and 50,000,000 Target Shares,
of which 12,130,571 Target Shares were issued and outstanding as of January 26,
1998 and no Target Shares were held in treasury. All of the issued and
outstanding Target Shares have been duly authorized and are validly issued,
fully paid and nonassessable, and none have been issued in violation of any
preemptive or similar right. Except as set forth in (S)3(b) of the Target
Disclosure Letter, neither the Target nor any of its Subsidiaries has any
outstanding or authorized Stock Rights. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation or similar rights with
respect to the Target or any of its Subsidiaries. The Target owns, directly or
indirectly, 100% of the outstanding shares of capital stock of each of its
Subsidiaries and each such share of capital stock has been duly authorized and
is validly issued, fully paid and nonassessable, and none of such shares of
capital stock has been issued in violation of any preemptive or similar right.
(c) Authorization of Transaction. The Target has full power and
----------------------------
authority (including full corporate power and corporate authority) and has taken
all required action necessary to properly execute and deliver this Agreement and
to perform its obligations hereunder, and this Agreement constitutes the valid
and legally binding obligation of the Target, enforceable in accordance with its
terms and conditions, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) general principles
of equity, regardless of whether asserted in a proceeding in equity or at law;
provided, however, that the Target cannot consummate the Merger unless and until
- -----------------
it receives the Requisite Stockholder Approval.
-11-
<PAGE>
(d) Noncontravention. Neither the execution and the delivery of
----------------
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree or other restriction of any government, governmental
agency or court to which the Target or any of its Subsidiaries is subject or any
provision of the charter or bylaws of the Target or any of its Subsidiaries or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify or cancel or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which the Target or any of its
Subsidiaries is a party or by which it is bound or to which any of its assets is
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, or failure to give notice would not
have a material adverse effect on the business, financial condition or results
of operations of the Target and its Subsidiaries taken as a whole or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement. Other than in connection with the provisions of the Hart-Scott-Rodino
Act, the Florida Business Corporation Law, the Securities Exchange Act, the
Securities Act, state securities laws, and with regard to any required
governmental or regulatory approvals or consents relating to the
telecommunications industry, the laws, rules or regulations of the United
States, the several states or the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands and of any other jurisdiction in
which such approvals or consents may be required, and any other statutes, rules
or regulations set forth in (S) 3(d) of the Target Disclosure Letter, neither
the Target nor any of its Subsidiaries needs to give any notice to, make any
filing with or obtain any authorization, consent or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to file
or to obtain any authorization, consent or approval would not have a material
adverse effect on the business, financial condition or results of operations of
the Target and its Subsidiaries taken as a whole or on the ability of the
Parties to consummate the transactions contemplated by this Agreement.
(e) Filings with the SEC. Except as set forth in (S)3(e) of the
--------------------
Target Disclosure Letter, the Target has made all filings with the SEC that it
has been required to make under the Securities Act and the Securities Exchange
Act (collectively, the "Target Reports"). Each of the Target Reports has
--------------
complied with the Securities Act and the Securities Exchange Act in all material
respects. None of the Target Reports, as of their respective dates, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(f) Financial Statements. The Target has filed an Annual Report
--------------------
on Form 10-K (the "Target 10-K") for the fiscal year ended December 31, 1996
-----------
(the "Target's Most Recent Audited Fiscal Year End") and a Quarterly Report on
--------------------------------------------
Form 10-Q (the "Target 10-Q") for the fiscal quarter ended September 30, 1997.
-----------
The financial statements included in the Target 10-K and the Target 10-Q
(including the related notes and schedules) have been prepared from the books
and records of the Target and its Subsidiaries in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby, and present fairly
in all material respects the financial condition of the Target and its
Subsidiaries as of the indicated dates and the results of operations and cash
flows of the Target and its Subsidiaries for the indicated periods, except that
unaudited interim results are subject to year-end adjustments.
-12-
<PAGE>
(g) Events Subsequent to Target's Most Recent Fiscal Year.
-----------------------------------------------------
Since the Target's Most Recent Audited Fiscal Year End, except as disclosed in
the Target Reports and except as set forth in (S) 3(g) of the Target Disclosure
Letter, (i) the Target and its Subsidiaries have conducted their respective
businesses only in, and have not engaged in any transaction other than according
to, the ordinary and usual course of such businesses, and (ii) there has not
been (A) any change in the financial condition, business or results of
operations of the Target or any of its Subsidiaries, or any development or
combination of developments relating to the Target or any of its Subsidiaries of
which management of the Target has knowledge, and which could reasonably be
expected to have a material adverse effect upon the business, financial
condition or results of operations of the Target and its Subsidiaries taken as a
whole; (B) any declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of the Target, or any redemption,
repurchase or other reacquisition of any of the capital stock of the Target; (C)
any change by the Target in accounting principles, practices or methods; (D) any
increase in the compensation of any officer or grant of any general salary or
benefits increase to their employees other than in the ordinary course of
business consistent with past practices; (E) any issuance or sale of any capital
stock or other securities (including any Stock Rights) by the Target or any of
its Subsidiaries of any kind, other than upon exercise of Stock Rights issued by
or binding upon the Target; (F) any modification, amendment or change to the
terms or conditions of any Stock Right; (G) any split, combination,
reclassification, redemption, repurchase or other reacquisition of any capital
stock or other securities of the Target or any of its Subsidiaries; or (H) the
taking by the Target of, or the entry into any agreement by the Target to take,
any action prohibited under clauses (i), and (iv) through (vi), of (S)5(d)
below.
(h) Compliance. Except as set forth in (S)3(h) of the Target
----------
Disclosure Letter, the Target and its Subsidiaries are in compliance with all
applicable foreign, federal, state and local laws, rules and regulations except
where the failure to be in compliance could reasonably be expected to have a
material adverse effect on the business, financial condition or results of
operations of the Target and its Subsidiaries taken as a whole.
(i) Brokers' and Other Fees. Except as set forth in (S)3(i) of
-----------------------
the Target Disclosure Letter, none of the Target and its Subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement. Attached
to (S)3(i) of the Target Disclosure Letter are true and complete copies of the
Target's engagement or similar letters with (i) the brokers, finders and agents
referred to in such section of the Target Disclosure Letter, and (ii) Kelley
Drye & Warren LLP as to its legal services to be performed in connection with
transactions involving a possible change in control of the Company, including
this Agreement and the transactions contemplated hereby.
(j) Litigation and Liabilities. Except as disclosed in the
--------------------------
Target Reports, or the Target Disclosure Letter, there are (i) no actions, suits
or proceedings pending or, to the knowledge of the management of the Target,
threatened against the Target or any of the Subsidiaries, or any facts or
circumstances known to the management of the Target which may give rise to an
action, suit or proceeding against the Target or any of its Subsidiaries, which
(x) could reasonably be expected to have a material adverse effect upon the
business, financial condition or results of
-13-
<PAGE>
operations of the Target and its Subsidiaries taken as a whole or (y) could
reasonably be expected to impair or delay the Target's ability to consummate the
transactions contemplated by this Agreement, or (ii) no obligations or
liabilities of the Target or any of its Subsidiaries, whether accrued,
contingent or otherwise, known to the management of the Target which could
reasonably be expected to have a material adverse effect upon the business,
financial condition or results of operations of the Target and its Subsidiaries
taken as a whole.
(k) Taxes. Except as set forth in (S)3(k) of the Target
-----
Disclosure Letter, the Target has duly filed all federal, state, local and
foreign tax returns required to be filed by it, and has duly paid, caused to be
paid or made adequate provision for the payment of all Taxes required to be paid
in respect of the periods covered by such returns, except where the failure to
pay such Taxes would not have a material adverse effect upon the business,
financial condition or results of operations of the Target and its Subsidiaries
taken as a whole. Except as set forth in (S)3(k) of the Target Disclosure
Letter, no claims for Taxes have been asserted against the Target and no
material deficiency for any Taxes has been proposed, asserted or assessed which
has not been resolved or paid in full. To the knowledge of the Target's
management, no Tax Return or taxable period of the Target is under examination
by any taxing authority, and Target has not received written notice of any
pending audit by any taxing authority. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any Tax
Return for any period of the Target. To the knowledge of the management of the
Target, the Target has no obligation or liability to pay Taxes of or
attributable to any other person or entity. No issue or claim has been asserted
for Taxes by any taxing authority for any prior period. Except as set forth in
(S)3(k) of the Target Disclosure Letter, there are no tax liens other than liens
for Taxes not yet due relating to the Target. The Target is not a party to any
agreement or contract which would result in payment of any "excess parachute
payment" within the meaning of Section 280G of the Code. The Target has not
filed any consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset
owned by the Target or any of the Subsidiaries. The Target has not been and is
not a United States real property holding company (as defined in Section
897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code).
(l) Fairness Opinion. The Robinson-Humphrey Company, LLC has
----------------
delivered to the Target Board, and not withdrawn, the Target Fairness Opinion,
and a true and complete copy thereof has been furnished to the Purchaser.
(m) Employee Benefits.
-----------------
(i) All pension, profit-sharing, deferred compensation,
savings, stock bonus and stock option plans, and all employee benefit plans,
whether or not covered by the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") which are sponsored by the Target or any ERISA Affiliate
-----
(as defined below) of the Target or to which the Target or any ERISA Affiliate
of the Target makes contributions, and which cover employees of the Target (the
"Employees") or former employees of the Target, all employment or severance
---------
contracts with officers of the Target, and any applicable "change of control" or
similar provisions in any plan, contract or arrangement that cover Employees
(collectively, "Benefit Plans" and individually a "Benefit Plan") are accurately
------------- ------------
and completely listed in (S)3(m) of the Target Disclosure Letter. No
-14-
<PAGE>
Benefit Plan is a multi-employer plan, money purchase plan or defined benefit
plan and no Benefit Plan is covered by Title IV of ERISA. True and complete
copies of all Benefit Plans (other than medical and other similar welfare plans
made generally available to all Employees) have been made available to the
Purchaser.
(ii) All Benefit Plans to the extent subject to ERISA, are
in compliance in all material respects with ERISA and the rules and regulations
promulgated thereunder. Each Benefit Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA ("Pension Plan") and which is
------------
intended to be qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), has received a favorable determination letter
----
from the Internal Revenue Service, which determination letter is currently in
effect, and there are no proceedings pending or, to the best knowledge of the
management of the Target, threatened, or any facts or circumstances known to the
management of the Target, which are reasonably likely to result in revocation of
any such favorable determination letter. There is no pending or, to the best
knowledge of the management of the Target, threatened litigation relating to the
Benefit Plans. Neither the Target nor any of the Subsidiaries has engaged in a
transaction with respect to any Benefit Plan that, assuming the taxable period
of such transaction expired as of the date hereof, is reasonably likely to
subject the Target or any of the Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502(i) of ERISA.
(iii) No liability under Title IV of ERISA has been or is
reasonably likely to be incurred by the Target or any of the Subsidiaries with
respect to any ongoing, frozen or terminated Benefit Plan that is a "single-
employer plan", within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any of them, or the single-employer plan of any entity
which is considered a predecessor of the Target or one employer with the Target
under Section 4001 of ERISA (an "ERISA Affiliate"); provided, however, for
--------------- -------- -------
purposes hereof, the Stockholder, its Affiliates and its partners, and their
respective Affiliates, shall not be considered an ERISA Affiliate. All
contributions required to be made under the terms of any Benefit Plan have been
timely made or reserves therefor on the balance sheet of the Target have been
established, which reserves are adequate. Except as required by Part 6 of Title
I of ERISA, the Target does not have any unfunded obligations for retiree health
and life benefits under any Benefit Plan.
(n) Florida Business Corporation Law. For purposes of Section
--------------------------------
607.0902 of the Florida Business Corporation Law, the execution and delivery of
the Stockholder Agreement and the purchase of Target Shares thereunder, and the
purchase of Target Shares or other securities issued by the Target by Purchaser
Companies generally, has received the prior approval of the Board of Directors
of the Target and, accordingly, will not constitute a "control share
acquisition" as defined in Section 607.0902(2) of the Florida Business
Corporation Law.
4. Representations and Warranties of the Purchaser and the Purchaser
-----------------------------------------------------------------
Subsidiary. Each of the Purchaser and the Purchaser Subsidiary, jointly and
- ----------
severally, represents and warrants to the Target that the statements contained
in this (S)4 are true and correct as of the date of this Agreement.
(a) Organization, Qualification and Corporate Power. Each of
-----------------------------------------------
the Purchaser and its Subsidiaries is a corporation duly organized, validly
existing and in good standing
-15-
<PAGE>
under the laws of the jurisdiction of its incorporation. Each of the Purchaser
and its Subsidiaries is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have a material
adverse effect on the business, financial condition or results of operations of
the Purchaser and its Subsidiaries taken as a whole or on the ability of the
Parties to consummate the transactions contemplated by this Agreement. Each of
the Purchaser and its Subsidiaries has full corporate power and corporate
authority, and all material foreign, federal and state governmental permits,
licenses and consents, to carry on the businesses in which it is engaged and to
own and use the properties owned and used by it. The Purchaser does not own any
equity interest in any corporation or other entity other than the Subsidiaries
listed in (S)4(a) of the Purchaser's disclosure letter accompanying this
Agreement (the "Purchaser Disclosure Letter").
---------------------------
(b) Capitalization. The entire authorized capital stock of the
--------------
Purchaser consists of 2,000,000 shares of preferred stock, $.01 par value per
share, none of which are issued and outstanding, and 40,000,000 Purchaser
Shares, of which 19,676,057 Purchaser Shares were issued and outstanding as of
January 30, 1998 and no Purchaser Shares were held in treasury. All of the
issued and outstanding Purchaser Shares have been duly authorized and are
validly issued, fully paid and nonassessable, and none have been issued in
violation of any preemptive or similar right. Except as set forth in (S)4(b) of
the Purchaser Disclosure Letter, neither the Purchaser nor any of its
Subsidiaries has any outstanding or authorized Stock Rights. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to the Purchaser or any of its
Subsidiaries. Except as set forth in (S)4(b) of the Purchaser Disclosure
Letter, the Purchaser, directly or indirectly, owns 100% of the outstanding
shares of capital stock of each of its Subsidiaries and each such share of
capital stock has been duly authorized and is validly issued, fully paid and
nonassessable, and none of such shares of capital stock has been issued in
violation of any preemptive or similar right.
(c) Authorization of Transaction. Each of the Purchaser and the
----------------------------
Purchaser Subsidiary has full power and authority (including full corporate
power and corporate authority), and has taken all required action necessary, to
properly execute and deliver this Agreement and to perform its obligations
hereunder, and this Agreement constitutes the valid and legally binding
obligation of each of the Purchaser and the Purchaser Subsidiary, enforceable in
accordance with its terms and conditions, except as limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii)
general principles of equity, regardless of whether asserted in a proceeding in
equity or at law; provided, however, that the Purchaser cannot consummate the
-----------------
Merger unless and until it receives the Requisite Stockholder Approval.
(d) Noncontravention. Neither the execution and the delivery of
----------------
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree or other restriction of any government, governmental
agency or court to which either the Purchaser or its Subsidiaries is subject or
any provision of the charter or bylaws of either the Purchaser or its
Subsidiaries or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel or require any notice under any
agreement,
-16-
<PAGE>
contract, lease, license, instrument or other arrangement to which either the
Purchaser or its Subsidiaries is a party or by which it is bound or to which any
of its assets is subject, except in the case of clause (ii) where the violation,
conflict, breach, default, acceleration, termination, modification, cancellation
or failure to give notice would not have a material adverse effect on the
business, financial condition or results of operations of the Purchaser and its
Subsidiaries taken as a whole or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Other than in connection with the
provisions of the Hart-Scott-Rodino Act, Nasdaq, the Securities Exchange Act,
the Securities Act, state securities laws, and with regard to any required
governmental or regulatory approvals or consents relating to the
telecommunications industry, the laws, rules or regulations of the United
States, the several states or the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands and of any other jurisdiction in
which such approvals or consents may be required, and any other statutes, rules
or regulations set forth in (S) 4(d) of the Purchaser Disclosure Letter, neither
the Purchaser nor its Subsidiaries needs to give any notice to, make any filing
with or obtain any authorization, consent or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to file
or to obtain any authorization, consent or approval would not have a material
adverse effect on the ability of the Parties to consummate the transactions
contemplated by this Agreement.
(e) Filings with the SEC. The Purchaser has made all filings
--------------------
with the SEC that it has been required to make under the Securities Act and the
Securities Exchange Act (collectively, the "Purchaser Reports"). Each of the
-----------------
Purchaser Reports has complied with the Securities Act and the Securities
Exchange Act in all material respects. None of the Purchaser Reports, as of
their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(f) Financial Statements. The Purchaser has filed an Annual
--------------------
Report on Form 10-K (the "Purchaser 10-K") for the fiscal year ended December
--------------
31, 1996 (the "Purchaser's Most Recent Audited Fiscal Year End") and a Quarterly
-----------------------------------------------
Report on Form 10-Q (the "Purchaser 10-Q") for the fiscal quarter ended
--------------
September 30, 1997. The financial statements included in the Purchaser 10-K and
the Purchaser 10-Q (including the related notes and schedules) have been
prepared from the books and records of the Purchaser and its Subsidiaries in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, and present fairly in all material respects the financial
condition of the Purchaser and its Subsidiaries as of the indicated dates and
the results of operations and cash flows of the Purchaser and its Subsidiaries
for the indicated periods, except that unaudited interim results are subject to
year-end adjustments.
(g) Events Subsequent to Purchaser's Most Recent Audited Fiscal
-----------------------------------------------------------
Year. Since the Most Recent Fiscal Year End, there has not been any change in
- ----
the financial condition, business or results of operations of the Purchaser or
any of its Subsidiaries, or any development or combination of developments
relating to the Purchaser or any of its Subsidiaries of which management of the
Purchaser has knowledge, and which could reasonably be expected to have a
material adverse effect upon the business, financial condition or results of
operations of the Purchaser and its Subsidiaries taken as a whole.
-17-
<PAGE>
(h) Brokers' Fees. Except as set forth in (S)4(h) of the
-------------
Purchaser Disclosure Letter, none of the Purchaser or its Subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement.
(i) Litigation and Liabilities. Except as disclosed in the
--------------------------
Purchaser Reports or the Purchaser Disclosure Letter, there are no actions,
suits or proceedings pending or, to the knowledge of the management of the
Purchaser, threatened against the Purchaser or any of the Subsidiaries, or any
facts or circumstances known to the management of the Purchaser which may give
rise to an action, suit or proceeding against the Purchaser or any of its
Subsidiaries, which (x) could reasonably be expected to have a material adverse
effect upon the business, financial condition or results of operations of the
Purchaser and its Subsidiaries taken as a whole or (y) could reasonably be
expected to impair or delay the Purchaser's ability to consummate the
transactions contemplated by this Agreement.
(j) Fairness Opinion. BT Alex. Brown Incorporated has delivered
----------------
to the Purchaser Board, and not withdrawn, the Purchaser Fairness Opinion, and a
true and complete copy thereof has been furnished to the Target.
(k) Taxes. The Purchaser has duly filed all federal, state,
-----
local and foreign tax returns required to be filed by it, and has duly paid,
caused to be paid or made adequate provision for the payment of all Taxes
required to be paid in respect of the periods covered by such returns, except
where the failure to pay such Taxes would not have a material adverse effect
upon the business, financial condition or results of operations of the Purchaser
and its Subsidiaries taken as a whole. Except as set forth in (S)4(k) of the
Purchaser Disclosure Letter, no claims for Taxes have been asserted against the
Purchaser and no material deficiency for any Taxes has been proposed, asserted
or assessed which has not been resolved or paid in full. To the knowledge of the
Purchaser's management, no Tax Return or taxable period of the Purchaser is
under examination by any taxing authority, and Purchaser has not received
written notice of any pending audit by any taxing authority. There are no
outstanding agreements or waivers extending the statutory period of limitation
applicable to any Tax Return for any period of the Target. To the knowledge of
the management of the Purchaser, the Purchaser has no obligation or liability to
pay Taxes of or attributable to any other person or entity. No issue or claim
has been asserted for Taxes by any taxing authority for any prior period. Except
as set forth in (S)4(k) of the Purchaser Disclosure Letter, there are no tax
liens other than liens for Taxes not yet due relating to the Purchaser. The
Purchaser is not a party to any agreement or contract which would result in
payment of any "excess parachute payment" within the meaning of Section 280G of
the Code. The Purchaser has not filed any consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset owned by the Purchaser or any of the
Subsidiaries. The Purchaser has not been and is not a United States real
property holding company (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code).
(l) Compliance. The Purchaser and its Subsidiaries are in
----------
compliance with all applicable foreign, federal, state and local laws, rules and
regulations except where the
-18-
<PAGE>
failure to be in compliance could reasonably be expected to have a material
adverse effect on the business, financial condition or results of operations of
the Purchaser and its Subsidiaries taken as a whole.
(m) Ownership of the Purchaser Subsidiary; No Prior Activities.
----------------------------------------------------------
The Purchaser Subsidiary is a direct, wholly-owned Subsidiary of the Purchaser
and was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement. Except for obligations or liabilities incurred
in connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, the Purchaser
Subsidiary has not and will not have incurred, directly or indirectly, through
any Subsidiary or Affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any Person which could adversely effect the
ability of the Purchaser to consummate the transactions contemplated hereby.
5. Covenants. The Parties agree as follows with respect to the
---------
period from and after the execution of this Agreement through and including the
Closing Date (except for (S)5(h) and (S)5(i), which will apply from and after
the Effective Time in accordance with their respective terms).
(a) General. Each of the Parties will use all reasonable efforts
-------
to take all actions and to do all things necessary in order to consummate and
make effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in (S)6
below).
(b) Notices and Consents. The Target and the Purchaser will give
--------------------
any notices (and will cause each of their respective Subsidiaries to give any
notices) to third parties, and will use all reasonable efforts to obtain (and
will cause each of their respective Subsidiaries to use all reasonable efforts
to obtain) any third-party consents, that may be required in connection with the
matters referred to in (S)3(d) and (S)4(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties,
--------------------------------
promptly after the date hereof, will (and the Target, promptly after the date
hereof, will cause each of its Subsidiaries to) give any notices to, make any
filings with and use all reasonable efforts to obtain any authorizations,
consents and approvals of governments and governmental agencies in connection
with the matters referred to in (S)3(d) and (S)4(d) above. Purchaser shall be
responsible for preparing and filing the appropriate applications and
documentation which are necessary or appropriate to request the authorizations,
consents and approvals from governmental authorities with jurisdiction over the
telecommunications industry to the Merger and the transactions contemplated
hereby and, the Target at its sole cost and expense will cooperate with the
Purchaser in that regard, providing such assistance as the Purchaser shall
reasonably request. The Purchaser will provide the Target with drafts of all
applications and other documents to be filed with any such regulatory authority
prior to such filing and shall give the Target a reasonable opportunity to
review and comment thereon. Without limiting the generality of the foregoing:
-19-
<PAGE>
(i) Federal Securities Laws. As promptly as practicable following
-----------------------
the date hereof, the Purchaser and the Purchaser Subsidiary shall, in
cooperation with the Target, prepare and file with the SEC preliminary proxy
materials which shall constitute the Joint Proxy Statement/Prospectus (such
proxy statement/prospectus, and any amendments or supplements thereto, the
"Joint Proxy Statement/Prospectus") and a registration statement on Form S-4
--------------------------------
with respect to the issuance of Purchaser Shares in the Merger (the
"Registration Statement"), and file with state securities administrators such
----------------------
registration statements or other documents as may be required under applicable
blue sky laws to qualify or register such Purchaser Shares in such states as are
designated by the Target (the "Blue Sky Filings"). The Joint Proxy
----------------
Statement/Prospectus will be included in the Registration Statement as the
Purchaser's prospectus. The Registration Statement and the Joint Proxy
Statement/ Prospectus shall comply as to form in all material respects with the
applicable provisions of the Securities Act and the Exchange Act and the rules
and regulations thereunder. Each of the Purchaser and the Purchaser Subsidiary
shall use all reasonable efforts to have the Registration Statement declared
effective by the SEC as promptly as practicable after filing with the SEC and to
keep the Registration Statement effective as long as is necessary to consummate
the Merger. The Purchaser and the Purchaser Subsidiary agree that none of the
information supplied or to be supplied by the Purchaser or the Purchaser
Subsidiary for inclusion or incorporation by reference in the Joint Proxy
Statement/Prospectus and each amendment or supplement thereto, at the time of
mailing thereof and at the time of the Target Special Meeting or the Purchaser
Special Meeting, will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Target agrees that none of the information supplied or to be
supplied by the Target for inclusion or incorporation by reference in the Joint
Proxy Statement/Prospectus and each amendment or supplement thereto, at the time
of mailing thereof and at the time of the Target Special Meeting or the
Purchaser Special Meeting, will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. For purposes of the foregoing, it is understood and agreed
that information concerning or related to the Purchaser and the Purchaser
Special Meeting will be deemed to have been supplied by the Purchaser and
information concerning or related to the Target and the Target Special Meeting
shall be deemed to have been supplied by the Target. The Purchaser will provide
the Target with a reasonable opportunity to review and comment on any amendment
or supplement to the Joint Proxy Statement/Prospectus prior to filing such with
the SEC, will provide the Target with a copy of all such filings made with the
SEC and will notify the Target as promptly as practicable after the receipt of
any comments from the SEC or its staff or from any state securities
administrators and of any request by the SEC or its staff or by any state
securities administrators for amendments or supplements to the Registration
Statement or any Blue Sky Filings or for additional information, and upon
request of the Target, will supply the Target and its legal counsel with copies
of all correspondence between the Purchaser or any of its representatives, on
the one hand, and the SEC, its staff or any state securities administrators, on
the other hand, with respect to the Registration Statement. No amendment or
supplement to the information supplied by the Target for inclusion in the Joint
Proxy Statement/Prospectus shall be made without the approval of the Target,
which approval shall not be unreasonably withheld or delayed. If, at any time
prior to the Effective Time, any event relating to the Target or the Purchaser
or any of their respective Affiliates, officers or directors is discovered by
the Target or the Purchaser, as the case may be, that is required by the
-20-
<PAGE>
Securities Act, the Exchange Act, or the rules or regulations thereunder, to be
set forth in an amendment to the Registration Statement or a supplement to the
Joint Proxy Statement/Prospectus, the Target or the Purchaser, as the case may
be, will as promptly as practicable inform the other, and such amendment or
supplement will be promptly filed with the SEC and disseminated to the
stockholders of the Target and the Purchaser, to the extent required by
applicable securities laws. All documents which the Target of the Purchaser
files or is responsible for filing with the SEC and any other regulatory agency
in connection with the Merger (including, without limitation, the Registration
Statement and the Joint Proxy Statement/Prospectus) will comply as to form and
content in all material respects with the provisions of applicable law.
Notwithstanding the foregoing, the Target, on the one hand, and the Purchaser
and the Purchaser Subsidiary, on the other hand, make no representations or
warranties with respect to any information that has been supplied in writing by
the other, or the other's auditors, attorneys, financial advisors, specifically
for use in the Registration Statement or the Joint Proxy Statement/Prospectus,
or in any other documents to be filed with the SEC or any other regulatory
agency expressly for use in connection with the transactions contemplated
hereby.
(ii) Florida Business Corporation Law and Delaware General
-----------------------------------------------------
Corporation Law. The Target will take all action, to the extent necessary in
- ---------------
accordance with applicable law, its articles of incorporation and bylaws to
convene a special meeting of its stockholders (the "Target Special Meeting"), as
----------------------
soon as reasonably practicable in order that the stockholders may consider and
vote upon the adoption of this Agreement and the approval of the Merger in
accordance with the Florida Business Corporation Law. The Purchaser will take
all action, to the extent necessary in accordance with applicable law, its
certificate of incorporation and bylaws to convene a special meeting of its
stockholders (the "Purchaser Special Meeting"), as soon as reasonably
-------------------------
practicable in order that the stockholders may consider and vote upon the
adoption of this Agreement and the approval of the Merger in order to satisfy
the requirements of the Nasdaq Stock Market ("Nasdaq"). The Target and the
------
Purchaser shall mail the Joint Proxy Statement/Prospectus to their respective
stockholders simultaneously and as soon as reasonably practicable. The Joint
Proxy Statement/Prospectus shall contain the affirmative unanimous
recommendations of the respective boards of directors of the Target and
Purchaser in favor of the adoption of this Agreement and the approval of the
Merger; provided, however, that no director of either the Target or the
-------- -------
Purchaser shall be required to take any action if it is advised in writing by
Kelley Drye & Warren LLP, in the case of the Target Board, or by Pepper Hamilton
LLP, in the case of the Purchaser Board, that such action would violate its
fiduciary duty to stockholders .
(iii) Hart-Scott-Rodino Act. As soon as possible after the
---------------------
date hereof, each of the Parties will file (and the Target will cause each of
its Subsidiaries to file) any Notification and Report Forms and related material
that it may be required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice under the Hart-
Scott-Rodino Act, will use all reasonable efforts to obtain (and the Target will
cause each of its Subsidiaries to use all reasonable efforts to obtain) an early
termination of the applicable waiting period, and will make (and the Target will
cause each of its Subsidiaries to make) any further filings pursuant thereto
that may be necessary.
-21-
<PAGE>
(iv) Periodic Reports. Unless an exemption shall be
----------------
expressly applicable to the Target, or unless the Purchaser agrees otherwise in
writing, the Target will file with the SEC and Nasdaq all reports required to be
filed by it pursuant to the rules and regulations of the SEC. Such reports and
other information shall comply in all material respects with all of the
requirements of the SEC rules and regulations and, when filed, will not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Purchaser and
the Purchaser Subsidiary, and their counsel, shall be given an opportunity to
review such filings prior to their being filed with the SEC and Nasdaq, and
shall be provided with final copies thereof concurrently with their filing with
the SEC.
(d) Operation of Business. The Target will not (and will not
---------------------
cause or permit any of its Subsidiaries to), without the written consent of the
Purchaser, take any action or enter into any transaction other than in the
ordinary course of business. Without limiting the generality of the foregoing,
except as expressly provided in this Agreement or (S)5(d) of the Target
Disclosure Letter, without the written consent of the Purchaser:
(i) none of the Target and its Subsidiaries will authorize
or effect any change in its charter or bylaws;
(ii) none of the Target and its Subsidiaries will grant any
Stock Rights or issue, sell or otherwise dispose of any of its capital stock
(except upon the conversion or exercise of Stock Rights outstanding as of the
date of this Agreement and except for options to purchase up to 330,000 Target
Shares to employees to be designated by the Target with the approval of the
Purchaser, it being understood that all such options shall be granted at the
fair market value of the Target Shares as of the date of grant, shall vest one-
third on each of the first, second and third anniversary of the grant date, but
shall not vest as a result of the completion of the Merger);
(iii) none of the Target and its Subsidiaries will declare,
set aside or pay any dividend or distribution with respect to its capital stock
(whether in cash or in kind), or redeem, repurchase or otherwise acquire any of
its capital stock;
(iv) none of the Target and its Subsidiaries (1) will have
incurred any indebtedness for borrowed money, whether to fund working capital
requirements, operating losses or capital expenditure requirements (including
equipment purchases), or for any capitalized lease obligation, or (2) will have
entered into any legally binding commitment or obligation to (w) incur any
capital expenditure (including equipment purchases), (x) pay any fees, costs or
expenses relating to the transactions contemplated hereby, (y) make any
acquisition earn-out payments or (z) pay any compensation (including, without
limitation, "stay-bonus" or similar arrangements or fees) to employees,
stockholders or consultants (or any Affiliates thereof) of the Target as a
result of the consummation of the Merger, the aggregate amount of clauses (1)
and (2), after giving effect to the Closing of the transactions contemplated
hereby, does not exceed $38 million; it being understood that prior to the
Closing, the Target agrees to advise the Purchaser, and to consult with the
Purchaser, in connection with entering into any commitment or obligation
relating to any capital expenditure
-22-
<PAGE>
(including equipment purchases) which individually, or when taken together with
related capital expenditures (including equipment purchases), exceeds $50,000;
(v) none of the Target and its Subsidiaries will impose
any Security Interest upon any of its assets other than in the ordinary course
of business provided, that no such Security Interest could reasonably be
--------
expected to have a material adverse effect on the business, financial condition
or results of operations of the Target and its Subsidiaries taken as a whole;
(vi) none of the Target and its Subsidiaries will make any
capital investment in, make any loan to or acquire the securities or assets of
any other Person other than to or from wholly-owned Subsidiaries in the ordinary
course of business;
(vii) none of the Target and its Subsidiaries will make any
change in employment terms for any of its directors, officers and employees
other than customary increases to employees who are neither executive officers
or directors of the Target or any Subsidiary awarded in the ordinary course of
business consistent with past practices (except as provided for in section
5(d)(vii) of the Target Disclosure Schedule); and
(viii) none of the Target and its Subsidiaries will commit
to any of the foregoing.
In the event the Target shall request the Purchaser to consent in
writing to an action otherwise prohibited by this (S)5(d), the Purchaser shall
use all reasonable efforts to respond in a prompt and timely fashion, but may
otherwise respond affirmatively or negatively in its sole discretion.
(e) Access. Each Party will (and will cause each of its
------
Subsidiaries to) permit representatives of the other Party to have access at all
reasonable times and in a manner so as not to materially interfere with the
normal business operations of the Target and its Subsidiaries, or the Purchaser
and its Subsidiaries, as applicable, to all premises, properties, personnel,
books, records (including tax records), contracts and documents of or pertaining
to such Party. Each Party and all of their respective representatives will treat
and hold as such any Confidential Information it receives from the other Party
or any of its representatives in accordance with the Confidentiality Agreement.
(f) Notice of Developments. Each Party will give prompt written
----------------------
notice to the others of any material adverse development causing a breach of any
of its own representations and warranties in (S)3 and (S)4 above. No disclosure
by any Party pursuant to this (S)5(f), however, shall be deemed to amend or
supplement the Target Disclosure Letter or Purchaser Disclosure Letter or to
prevent or cure any misrepresentation, breach of warranty or breach of covenant.
(g) Exclusivity. Neither the Target nor any of its officers and
-----------
directors shall, and the Target will cause its employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by the Target) not to, directly or indirectly, encourage,
initiate or solicit any inquiries or the making of any Acquisition Proposal or,
-23-
<PAGE>
except to the extent required for the discharge by the Target Board of its
fiduciary duties to the Target Stockholders as advised in writing by Kelley Drye
& Warren LLP, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise assist or facilitate any effort or attempt by
any Person or entity (other than the Purchaser and the Purchaser Subsidiary, or
their officers, directors, representatives, agents, Affiliates or associates) to
make or implement an Acquisition Proposal. The Target will notify the Purchaser
promptly if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be instituted or continued with, the Target, and will provide to the
Purchaser a copy of such Acquisition Proposal. The Target and its officers and
directors will, and the Target will cause its employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by the Target) to, immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. The Target will
promptly request that each Person to whom any confidential documents or
information concerning the Target was disclosed by the Target since January 1,
1997 for the purpose of discussing a possible change in control transaction
involving the Target (a "Potential Buyer"), either return all of such
---------------
confidential documents and information, and all copies thereof, to the Target or
deliver a written certification of such destruction to the Target. The Target
shall use all reasonable efforts to cause each such Potential Buyer to comply
with such request.
(h) Insurance and Indemnification.
-----------------------------
(i) The Purchaser will provide each individual who served as
a director or officer of the Target at any time prior to the Effective Time with
liability insurance for a period of six years after the Effective Time no less
favorable in coverage and amount than any applicable insurance of the Target in
effect immediately prior to the Effective Time; provided, however, if the
-------- -------
existing liability insurance expires, or is terminated or canceled by the
insurance carrier during such six-year period, the Surviving Corporation will
use its best efforts to obtain as much liability insurance as can be obtained
for the remainder of such period for a premium not in excess (on an annualized
basis) of 150% of the last annual premium paid prior to the date hereof. In
fulfillment of its obligations under this clause (i), the Purchaser may arrange
insurance providing coverage that in the aggregate is no less favorable to the
Target's officers and directors than that which is currently in effect for the
Purchaser's officers and directors.
(ii) The Purchaser (A) will not take or knowingly permit to
be taken any action to alter or impair any exculpatory or indemnification
provisions now existing in the articles of incorporation, bylaws or
indemnification and employment agreements of the Target or any of its
Subsidiaries for the benefit of any individual who served as a director or
officer of the Target or any of its Subsidiaries (an "Indemnified Party") at any
-----------------
time prior to the Effective Time, and (B) shall cause the Surviving Corporation
to honor and fulfill such provisions until the date which is six years from the
Effective Date; provided, however, in the event any claim or claims are asserted
-------- -------
within such period, all rights to indemnification in respect of such claim or
claims shall continue until the final disposition thereof.
-24-
<PAGE>
(iii) To the extent clause (i) above shall not serve to
indemnify and hold harmless an Indemnified Party, the Purchaser, subject to the
terms and conditions of this clause (iii), will indemnify, for a period of six
years from the Effective Date, to the fullest extent permitted under applicable
law each Indemnified Party from and against any and all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses and fees, including all court costs and reasonable
attorneys' fees and expenses, resulting from, arising out of, relating to or
caused by this Agreement or any of the transactions contemplated herein;
provided, however, in the event any claim or claims are asserted or threatened
- -------- -------
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any and all such
claims. Any Indemnified Party wishing to claim indemnification under this clause
(iii), and notwithstanding the provisions set forth in the Target's articles of
incorporation, by-laws or other agreements respecting indemnification of
directors or officers, upon learning of any such claim, action, suit, proceeding
or investigation, shall promptly notify the Purchaser thereof, but the failure
to so notify shall not relieve the Purchaser of any liability it may have to
such Indemnified Party if such failure does not materially prejudice the
Purchaser. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (A) the
Purchaser or the Surviving Corporation shall have the right to assume the
defense thereof and the Purchaser shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense
thereof, except that if the Purchaser or the Surviving Corporation fails to
assume such defense or counsel for the Purchaser advises that there are issues
which raise conflicts of interest between the Purchaser or the Surviving
Corporation, on the one hand, and the Indemnified Parties, on the other hand,
the Indemnified Parties may retain counsel satisfactory to them, and the Target,
the Purchaser or the Purchaser Subsidiary shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; provided, however, that the Purchaser shall be obligated
-------- -------
to pay for only one firm of counsel for all Indemnified Parties in any
jurisdiction unless the use of one counsel for such Indemnified Parties would
present such counsel with a conflict of interest, in which case the Purchaser
need only pay for separate counsel to the extent necessary to resolve such
conflict; (B) the Indemnified Parties will reasonably cooperate in the defense
of any such matter; and (C) the Purchaser shall not be liable for any settlement
effectuated without its prior written consent, which consent shall not be
unreasonably withheld or delayed. Purchaser shall not settle any action or
claim identified in this (S)5(h)(iii) in any manner that would impose any
liability or penalty on an Indemnified Party not paid by the Purchaser or the
Surviving Corporation without such Indemnified Party's prior written consent,
which consent shall not be unreasonably withheld or delayed.
(iv) Notwithstanding anything contained in clause (iii)
above, the Purchaser shall not have any obligation hereunder to any Indemnified
Party (A) if the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law, (B) the conduct of the
Indemnified Party relating to the matter for which indemnification is sought
involved bad faith or willful misconduct, or (C) with respect to actions taken
by any such Indemnified Party in its individual capacity, including, without
limitations, with respect to any matters relating, directly or indirectly, to
the purchase, sale or trading of securities
-25-
<PAGE>
issued by the Target other than a tender or sale pursuant to a stock tender
agreement or (D) if such Indemnified Party shall have breached its obligation to
cooperate with the Purchaser in the defense of any claim in respect of which
indemnification is sought.
(i) Financial Statements. As soon as they are made available to
--------------------
and reviewed by senior management of the Target, the Target shall make available
to the Purchaser copies of all internally generated monthly, quarterly
(including, quarterly statements for the three-month period ended December 31,
1997) and annual financial statements, consisting of consolidated balance
sheets, and statements of income and of cash flows. The delivery of any such
quarterly and annual financial statements shall constitute a representation and
warranty by the Target that such financial statements were prepared from the
books and records of the Target, in accordance with GAAP consistently applied
during the periods involved and fairly present the financial condition, results
of operations and cash flows, as the case may be, of the Target as at and for
the periods set forth therein (subject in the case of quarterly financial
statements to the absence of complete footnotes other than as may be required by
GAAP and subject to normal year-end audit adjustments).
(j) Continuity of Business Enterprise. The Purchaser, Purchaser
---------------------------------
Subsidiary or any other member of the qualified group (as defined in Treasury
Regulation (S)1.368-1(d) shall, for the foreseeable future, continue at least
one significant historic business line of the Target and use at least a
significant portion of the Target's historic business assets in a business, in
each case within the meaning of Treasury Regulation (S)1.368-1(d).
6. Conditions to Obligation to Close.
---------------------------------
(a) Conditions to Obligation of the Purchaser and the Purchaser
-----------------------------------------------------------
Subsidiary. The obligation of each of the Purchaser and the Purchaser
- ----------
Subsidiary to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction or waiver by Purchaser or Purchaser
Subsidiary of the following conditions at or prior to the Closing Date:
(i) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(ii) the Target and its Subsidiaries shall have procured all
third-party consents specified in (S)5(b) above which are applicable to the
Target and its Subsidiaries;
(iii) the representations and warranties set forth in (S)3
above shall be true and correct in all material respects at and as of the
Closing Date, except for (A) changes contemplated by this Agreement, (B) those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct as of such date);
(iv) the Target shall have performed and complied with all
of its covenants hereunder in all material respects through the Closing;
-26-
<PAGE>
(v) neither any statute, rule, regulation, order,
stipulation or injunction (each an "Order") shall be enacted, promulgated,
-----
entered, enforced or deemed applicable to the Merger nor any other action shall
have been taken by any governmental authority, administrative agency or court of
competent jurisdiction (A) which prohibits the consummation of the transactions
contemplated by the Merger; (B) which prohibits the Purchaser's or the Purchaser
Subsidiary's ownership or operation of all or any material portion of their or
the Target's business or assets, or which compels the Purchaser or the Purchaser
Subsidiary to dispose of or hold separate all or any material portion of the
Purchaser's or the Purchaser Subsidiary's or the Target's business or assets as
a result of the transactions contemplated by the Merger; (C) which makes the
purchase of, or payment for, some or all of the Target Shares illegal; or (D)
which imposes material limitations on the ability of the Purchaser or the
Purchaser Subsidiary to acquire or hold or to exercise effectively all rights of
ownership of Target Shares, including, without limitation, the right to vote any
Target Shares purchased by the Purchaser on all matters properly presented to
the Target Stockholders; or (E) which imposes any limitations on the ability of
the Purchaser or the Purchaser Subsidiary, or any of their respective
Subsidiaries, effectively to control in any material respect the business or
operations of the Target or any of its Subsidiaries;
(vi) the Target shall have delivered to the Purchaser and
the Purchaser Subsidiary a certificate to the effect that each of the conditions
specified above in (S)6(a)(i)-(S)6(a)(iv) is satisfied in all respects;
provided, however, with respect to (S)6(a)(i), the Target shall only be required
- -------- -------
to certify that this Agreement and the Merger received the Requisite Stockholder
Approval of the Target Stockholders;
(vii) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated, and the Parties shall have received all other material
authorizations, consents and approvals of governments and governmental agencies
referred to in (S)3(d) and (S)4(d) above;
(viii) the Purchase Warrant shall have been exercised in
full, provided, that such exercise may be conditioned upon the effectiveness of
--------
the Merger;
(ix) the Purchaser Shares to be issued in the Merger shall
have been approved upon official notice of issuance for quotation on Nasdaq,
subject to official notice of issuance; and
(x) the Registration Statement shall have been declared
effective by the SEC under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by the SEC
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
Subject to the provisions of applicable law, the Purchaser
Subsidiary may waive, in whole or in part, any condition specified in this
(S)6(a) if they execute a writing so stating at or prior to the Closing.
-27-
<PAGE>
(b) Conditions to Obligation of the Target. The obligation of
--------------------------------------
the Target to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction or waiver by the Target of the
following conditions at or prior to the Closing Date:
(i) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(ii) the Purchaser and its Subsidiaries shall have
procured all material third-party consents specified in (S)5(b) above which are
applicable to the Purchaser and its Subsidiaries;
(iii) the representations and warranties set forth in (S)4
above shall be true and correct in all material respects at and as of the
Closing Date, except for (A) changes contemplated by this Agreement, (B) those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct as of such date);
(iv) each of the Purchaser and the Purchaser Subsidiary
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing;
(v) neither any Order shall be enacted, promulgated,
entered, enforced or deemed applicable to the Merger nor any other action shall
have been taken by any governmental authority, administrative agency or court of
competent jurisdiction (A) which prohibits the consummation of the transactions
contemplated by the Merger; (B) which prohibits the Purchaser's or the Purchaser
Subsidiary's ownership or operation of all or any material portion of their or
the Target's business or assets, or which compels the Purchaser or the Purchaser
Subsidiary to dispose of or hold separate all or any material portion of the
Purchaser's or the Purchaser Subsidiary's or the Target's business or assets as
a result of the transactions contemplated by the Merger; or (C) which makes the
purchase of, or payment for, some or all of the Target Shares illegal;
(vi) each of the Purchaser and the Purchaser Subsidiary
shall have delivered to the Target a certificate to the effect that each of the
conditions specified above in (S)6(b)(i)-(iv) is satisfied in all respects;
provided, however, with respect to (S)6(b)(i), each of the Purchaser and the
- -------- -------
Purchaser Subsidiary shall only be required to certify that this Agreement and
the Merger received the Requisite Stockholder Approval of the Purchaser
Stockholders;
(vii) the Merger shall be a tax-free merger of the
Purchaser Subsidiary with and into the Target in a reorganization pursuant to
Code Section 368(a)(2)(E);
(viii) all applicable waiting periods (and any extensions
thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated and the Parties shall have received all other material
authorizations, consents and approvals of governments and governmental agencies
referred to in (S)3(d) and (S)4(d) above;
-28-
<PAGE>
(ix) the Registration Statement shall have been declared
effective by the SEC under the Securities Act; and
(x) the Purchaser Shares to be issued in the Merger shall
have been approved for quotation on Nasdaq, subject to official notice of
issuance.
Subject to the provisions of applicable law, the Target may waive, in
whole or in part, any condition specified in this (S)6(b) if it executes a
writing so stating at or prior to the Closing.
7. Termination.
-----------
(a) Termination of Agreement. The Parties may terminate this
------------------------
Agreement with the prior authorization of their respective board of directors as
provided below:
(i) The Parties may terminate this Agreement, and the
Merger may be abandoned, by mutual written consent at any time prior to the
Effective Time;
(ii) This Agreement may be terminated and the Merger may be
abandoned by action of the Board of Directors of either the Purchaser or the
Target if (i) the Merger shall not have been consummated by October 31, 1998
(unless the failure to consummate the Merger by such date is due to the action
or failure to act of the Party seeking to terminate), or (iii) if any Order
shall have become final and non-appealable;
(iii) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, before or after the approval
by the Target Stockholders or the Purchaser Stockholders, by action of the
Target Board, in the event that the Purchaser or the Purchaser Subsidiary shall
have breached any of their representations, warranties or covenants under this
Agreement which breach shall have caused a reasonable likelihood that the
Purchaser and the Purchaser Subsidiary will not be able to consummate the
Merger;
(iv) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, before or after the approval
by the Target Stockholders or the Purchaser Stockholders, by action of the
Purchaser Board, in the event that the Target shall have breached any of its
representations, warranties or covenants under this Agreement which breach shall
have caused a reasonable likelihood that the Target will not be able to
consummate the Merger;
(v) (A) This Agreement may be terminated by the Target
and the Merger may be abandoned at any time, before or after the approval by the
Target Stockholders or the Purchaser Stockholders, if, without violating its
obligations under (S)5(g) hereof, the Target enters into an agreement with
respect to an unsolicited Acquisition Proposal after having received (A) the
written opinion from The Robinson-Humphrey Company, Inc. to the effect that such
Acquisition Proposal is more favorable to the Target Stockholders from a
financial point of view than the Merger, and (B) the written opinion of Kelley
Drye & Warren LLP that approval, acceptance
-29-
<PAGE>
and recommendation of such Acquisition Proposal is required by fiduciary
obligations to the Target Stockholders under applicable law;
(B) This Agreement may be terminated by the Purchaser, and
the Merger may be abandoned, if the Target Board (i) enters into or publicly
announces its intention to enter into an agreement or agreement in principle
with respect to an Acquisition Proposal, (ii) withdraws or materially modifies
its recommendation to the Target Stockholders of this Agreement or the Merger or
(iii) after the receipt of an Acquisition Proposal, fails to confirm publicly,
upon the request of the Purchaser, its recommendation to the Target Stockholders
that the Target Stockholders approve this Agreement and the Merger;
(vi) This Agreement may be terminated by the Target , and the
Merger may be abandoned in the event that the Weighted Average Sales Price of a
Purchaser Share as of the Closing Date is less than $14.0210; provided, however,
-------- -------
the Purchaser may override such termination and reinstate this Agreement within
three (3) Business Days after it has received written notice of termination by
the Target pursuant to this clause (vi), by delivery of written notice to the
Target that it agrees to pay to each holder of a Target Share additional
consideration such that, when added to the Per Share Merger Consideration, each
holder of Target Shares shall receive an aggregate value of $8.8235 for each
Target Share exchanged in the Merger (the "Additional Consideration"). The
------------------------
Additional Consideration may be paid in cash or in Purchaser Shares, or a
combination thereof, at the election of the Purchaser, with each such Purchaser
Share to be delivered to be valued based upon the Weighted Average Sales Price
of a Purchaser Share as of the Closing Date. Notwithstanding the foregoing, the
amount of cash which may be delivered pursuant to this clause (vi), if any,
shall not be in an amount which would result in the Merger not being qualified
as a reorganization pursuant to Code (S)368(a)(2)(E);
(vii) Any Party may terminate this Agreement, and the Merger may
be abandoned, by giving written notice to the other Parties at any time after
the Target Special Meeting in the event that this Agreement and the Merger fail
to receive the Requisite Stockholder Approval by the Target Stockholders; or
(viii) Any Party may terminate this Agreement, and the Merger
may be abandoned, by giving written notice to the other Parties at any time
after the Purchaser Special Meeting in the event that this Agreement and the
Merger fail to receive the Requisite Stockholder Approval by the Purchaser
Stockholders.
(b) Effect of Termination.
---------------------
(i) Except as provided in clauses (ii) or (iii) of this
(S)7(b), if any Party terminates this Agreement pursuant to (S)7(a) above, all
rights and obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party (except for any liability of any Party
then in breach); provided, however, that the provisions of the Confidentiality
-----------------
Agreement, this (S)7(b) and (S)8(l) below, shall survive any such termination.
-30-
<PAGE>
(ii) If this Agreement is terminated (x) by the Purchaser
pursuant to (S)7(a)(iv), but only with respect to a breach by Target of (S)5(g),
(y) by Target pursuant to (S)7(a)(v)(A) or (z) by Purchaser pursuant to
(S)7(a)(v)(B), then, within five (5) days after such termination, the Target
shall pay the Purchaser the sum of $5,000,000 in immediately available funds,
which the Parties agree is a reasonable sum to reimburse the Purchaser for costs
and expenses incurred in connection with this Agreement.
(iii) If this Agreement is terminated by the Target as a
result of the Purchaser not obtaining the Requisite Stockholder Approval by the
Purchaser Stockholders, then the Purchaser shall pay the Target, within five (5)
days after the completion of the meeting at which the Purchaser Stockholders
considered the approval of this Agreement and the Merger, the sum of $5,000,000
in immediately available funds, which the Parties agree is a reasonable sum to
reimburse the Target for costs and expenses incurred in connection with this
Agreement.
8. Miscellaneous.
-------------
(a) Survival. None of the representations, warranties and
--------
covenants of the Parties (other than the provisions in (S)2 above concerning
payment of the Per Share Merger Consideration and the provisions in (S)5(h)
above concerning insurance and indemnification and (S)5(i) concerning continuity
of business enterprise) will survive the Effective Time.
(b) Press Releases and Public Announcements. No Party shall
---------------------------------------
issue any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
Parties; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use all reasonable efforts to advise the other Parties
prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not
----------------------------
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; provided, however, that (i) the
provisions in (S)2 above (A) concerning payment of the Per Share Merger
Consideration are intended for the benefit of the Target Stockholders and (B)
concerning the conversion of the stock options are intended for the benefit of
the holders of such stock options, and (ii) the provisions in (S)5(h) above
concerning insurance and indemnification are intended for the benefit of the
individuals specified therein and their respective legal representatives.
(d) Entire Agreement. This Agreement (including the
----------------
Confidentiality Agreement and the other documents referred to herein)
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject matter hereof.
(e) Binding Effect; Assignment. This Agreement shall be binding
--------------------------
upon and inure to the benefit of the Parties and their respective successors and
permitted assigns. No Party may assign or delegate either this Agreement or any
of its rights, interests or obligations hereunder,
-31-
<PAGE>
by operation of law or otherwise, without the prior written approval of the
other Parties. Any purported assignment or delegation without such approval
shall be void and of no effect.
(f) Counterparts. This Agreement may be executed (including by
------------
facsimile) in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement
--------
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims and other
-------
communications hereunder shall be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid and addressed to the intended recipient as
set forth below:
If to the Target: TresCom International, Inc.
----------------
200 East Broward Blvd.
Ft. Lauderdale, FL 33301
Attention: Chief Executive Officer
Fax: (954) 463-4353
With a Copy to: Kelley Drye & Warren LLP
--------------
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3229
Fax: (203) 351-8115
Attention: John T. Capetta, Esquire
If to the Purchaser: PRIMUSTELECOMMUNICATIONS
-------------------
GROUP INC.
2070 Chain Bridge Road
Vienna, VA 22182
K. Paul Singh, Chairman and
Chief Executive Officer
Fax: (703) 902-2814
With a Copy to: Pepper Hamilton LLP
--------------
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Fax: (215) 981-4750
Attention: James D. Epstein, Esquire
-32-
<PAGE>
If to the Purchaser Subsidiary: TAURUS ACQUISITION CORPORATION
------------------------------
2070 Chain Bridge Road
Vienna, VA 22182
K. Paul Singh, Chairman and
Chief Executive Officer
Fax: (703) 902-2814
With a Copy to: Pepper Hamilton LLP
--------------
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Fax: (215) 981-4750
Attention: James D. Epstein,
Esquire
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using
personal delivery, expedited courier, messenger service, telecopy or ordinary
mail, but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
intended recipient. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Parties notice in the manner set forth in this (S)8(h),
provided that no such change of address shall be effective until it actually is
received by the intended recipient.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF FLORIDA WITHOUT
GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF FLORIDA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF FLORIDA.
(j) Amendments and Waivers. The Parties may mutually amend any
----------------------
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
-----------------
that any amendment effected subsequent to Requisite Stockholder Approval will be
subject to the restrictions contained in the Florida Business Corporation Law
and the Delaware General Corporation Law, to the extent applicable. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the Parties. No waiver by any party of
any default, misrepresentation or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(k) Severability. Any term or provision of this Agreement that is
------------
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
-33-
<PAGE>
(l) Expenses. Except as expressly set forth elsewhere in this
--------
Agreement, each of the Parties will bear its own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
(m) Construction. The Parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement. Any reference to any federal, state, local
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation. The phrase "business
day" shall mean any day other than a day on which banks in the State of New York
are required or authorized to be closed. Any disclosure made with reference to
one or more sections of the Target Disclosure Schedule shall be deemed disclosed
with respect to each other section therein as to which such disclosure is
relevant provided that such relevance is reasonably apparent. Disclosure of any
matter in the Target Disclosure Schedule or the Purchaser Disclosure Schedule
shall not be deemed an admission that such matter is material.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
---------------------------------------
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) Definition of Knowledge. As used herein, the words
-----------------------
"knowledge", "best knowledge" or "known" shall, (i) with respect to the Target
or Target management, mean the actual knowledge of the corporate executive
officers of the Target, in each case after such individuals have made due and
diligent inquiry as to the matters which are the subject of the statements which
are "known" by the Target or made to the "knowledge" or "best knowledge" of the
Target, (ii) with respect to the Purchaser or the Purchaser management, mean the
actual knowledge of the corporate executive officers of the Purchaser, in each
case after such individuals have made due and diligent inquiry as to the matters
which are the subject of the statements which are "known" by the Purchaser or
made to the "knowledge" or "best knowledge" of the Purchaser, and (iii) with
respect to the Purchaser Subsidiary or the Purchaser Subsidiary management, mean
the actual knowledge of the corporate executive officers of the Purchaser or the
Purchaser Subsidiary, in each case after such individuals have made due and
diligent inquiry as to the matters which are the subject of the statements which
are "known" by the Purchaser Subsidiary or made to the "knowledge" or "best
knowledge" of the Purchaser Subsidiary.
(p) WAIVER OF JURY TRIAL. EACH OF THE PURCHASER, THE PURCHASER
--------------------
SUBSIDIARY AND THE TARGET, AND EACH INDEMNIFIED PARTY, HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
-34-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
PRIMUS COMMUNICATIONS GROUP, INC.
By: /s/ K. Paul Singh
--------------------
Name: K. Paul Singh
Title: President and Chief Executive Officer
TAURUS ACQUISITION CORPORATION
By: /s/ K. Paul Singh
--------------------
Name: K. Paul Singh
Title: President
TRESCOM INTERNATIONAL, INC.
By:________________________________
Name: Wesley T. O'Brien
Title: President Chief Executive Officer
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
PRIMUS COMMUNICATIONS GROUP, INC.
By:___________________________
Name: K. Paul Singh
Title: President and Chief Executive Officer
MERGER SUB
By:___________________________
Name: K. Paul Singh
Title: President
TRESCOM INTERNATIONAL, INC.
By: /s/ Wesley T. O'Brien
---------------------------
Name: Wesley T. O'Brien
Title: President and Chief Executive Officer
<PAGE>
EXHIBIT A
---------
ARTICLES OF MERGER
OF
MERGER SUB,
A FLORIDA CORPORATION
INTO
TARGET,
A FLORIDA CORPORATION
_______________________
Pursuant to Section 607.1105 of the Florida Business Corporation Act,
the undersigned corporations adopt the following Articles of Merger:
FIRST: Merger Sub, a Florida corporation ("Merger Sub"), shall be
merged with and into Target, a Florida corporation ("Target"), whereby Target
shall be the surviving corporation (the "Merger").
SECOND: The Merger shall become effective as of the day on which
these Articles of Merger are filed with the Department of State of the State of
Florida.
THIRD: The Agreement and Plan of Merger, dated as of February ____,
1998, pursuant to which Merger Sub shall be merged with and into Target, was
adopted by the shareholder of Merger Sub on the ____ day of _____________ 1998,
and was adopted by the shareholders of Target on the ____ day of _____________,
1998.
IN WITNESS WHEREOF, these Articles of Merger have been executed on
behalf of Merger Sub and Target by their authorized officers as of ____________,
1998.
TARGET
By:_____________________________
Name:
Title:
MERGER SUB
By:_____________________________
Name:
Title:
<PAGE>
Exhibit 2
---------
SHAREHOLDER AGREEMENT
---------------------
STOCKHOLDER AGREEMENT (this "Agreement"), dated as of February 3, 1998
---------
by and among Warburg, Pincus Investors, LLP, a Delaware limited partnership
("Stockholder"), PRIMUS TELECOMMUNICATIONS GROUP, INC., a Delaware corporation
("Purchaser"), Taurus Acquisition Corporation, a Florida corporation and a
---------
wholly-owned subsidiary of Purchaser ("Purchaser Subsidiary"), and K. Paul
--------------------
Singh, a resident of the Commonwealth of Virginia (the "Executive").
---------
W I T N E S S E T H:
--------------------
WHEREAS, concurrently herewith, Purchaser, TRESCOM INTERNATIONAL,
INC., a Florida corporation ("Company"), and Purchaser Subsidiary are entering
-------
into an Agreement and Plan of Merger of even date herewith (the "Merger
------
Agreement"), pursuant to which Purchaser will acquire all of the outstanding
- ---------
shares of common stock, $0.0419 par value per share (the "Common Stock"), of the
------------
Company, pursuant to a reverse triangular merger of Purchaser Subsidiary with
and into Company (the "Merger");
------
WHEREAS, the Stockholder owns, as of the date hereof, 6,319,468 shares of
Common Stock (the "Existing Shares", together with any shares of Common Stock
---------------
acquired after the date hereof and prior to the termination hereof (including
358,034 shares of Common Stock acquired pursuant to the exercise of the warrant
dated October 2, 1995 issued by the Company to Stockholder (the "Warrant")),
-------
hereinafter collectively referred to as the "Shares");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, and in reliance upon Stockholder' s representations, warranties,
covenants and agreements hereunder, Purchaser has requested that Stockholder
agree, and Stockholder has agreed, to enter into this Agreement; and
WHEREAS, this Agreement is being entered into concurrently with the
execution of the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for such other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and intending to be legally
bound hereby, it is agreed as follows:
1. Agreement to Vote.
-----------------
1.1 Stockholder hereby agrees that, except as expressly set forth below,
during the time this Agreement is in effect, at any meeting of the stockholders
of Company, however called, and in any action by consent of the stockholders of
Company, Stockholder shall: (a) vote the Shares in favor of the Merger; (b)
vote the Shares against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Company under the Merger Agreement; (c) vote the Shares against any action or
agreement that would impede,
<PAGE>
interfere with, delay, postpone or attempt to discourage the Merger including,
but not limited to, (i) any extraordinary corporate transaction (other than the
Merger), such as a merger, other business combination, recapitalization,
reorganization or liquidation (a "Business Combination Transaction") involving
--------------------------------
Company, (ii) a sale or transfer of a material amount of assets of Company or
any of its Subsidiaries, (iii) any change in the management or board of
directors of Company, except as otherwise agreed to in writing by Purchaser,
(iv) any material change in the present capitalization of the Company, or (v)
any other material change in the corporate structure or business of Company; and
(d) without limiting the foregoing, consult with Purchaser prior to any such
vote and vote such Shares in such manner as is determined by Purchaser to be in
compliance with the provisions of this Section 1. Stockholder acknowledges
receipt and review of a copy of the Merger Agreement. In furtherance of this
Section 1, Stockholder hereby grants to Purchaser an irrevocable proxy to vote
the Shares in accordance with the terms and conditions of this Agreement, it
being understood that such proxy is coupled with an interest; provided, however,
such proxy shall automatically terminate upon the termination of the Merger
Agreement in accordance with its terms.
2. Participation Rights.
--------------------
2.1 Subject to the terms and conditions set forth herein, in the event
that the Merger Agreement is terminated pursuant to (S)7(a)(iv) (but only if
such termination is as a result of a breach by the Company of (S)5(g) of the
Merger Agreement) or (S)7(a)(v) of the Merger Agreement, and, upon or following
such termination, a definitive agreement with respect to a Third Party
Transaction (as defined below) is executed by the Company and a Third Party (as
defined below) prior to or within 90 days of such termination, and the
Stockholder receives any cash or non-cash consideration (the "Alternative
-----------
Consideration") in respect of all or any portion of the Shares in connection
- -------------
with such Third Party Transaction, the Stockholder within five days after
receipt of the Alternative Consideration (or after the date the value of non-
cash Alternative Consideration is determined as provided below) shall pay over
to Purchaser or its designee, an amount equal in value to fifty percent (50%) of
the excess (if any) of (x) such Alternative Consideration over (y) (A) $10 per
----
Share multiplied by (B) the number of Shares with respect to which the
Stockholder received such Alternative Consideration. If the Alternative
Consideration received by the Stockholder shall be securities listed on a
national securities exchange or traded on the Nasdaq National Market ("NASDAQ"),
------
the per share value of such consideration shall be equal to the closing price
per share listed on such national securities exchange or NASDAQ on the date such
transaction is consummated; and if the consideration received by the Stockholder
shall be in a form other than such listed or traded securities, the per share
value shall be determined in good faith as of the date such transaction is
consummated by the Purchaser or its designee and the Stockholder, or, if the
Purchaser or its designee and the Stockholder cannot reach agreement, by a
nationally recognized investment banking firm reasonably acceptable to the
Purchaser and the Stockholder.
2.2 The term "Third Party Transaction" shall mean a transaction
-----------------------
constituting an Acquisition Proposal (as defined in the Merger Agreement) with a
person or entity other than any of the Purchaser Companies, as defined in the
Merger Agreement (a "Third Party").
-----------
-2-
<PAGE>
3. Representations and Warranties of Stockholder. Stockholder represents and
---------------------------------------------
warrants to Purchaser and Purchaser Subsidiary as follows:
3.1 Ownership of Shares. On the date hereof the Existing Shares are all
-------------------
of the Shares currently beneficially owned (which, for purposes of this
Agreement shall be determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) by the Stockholder or any
------------
Affiliate (as defined in the Merger Agreement) of the Stockholder. On the
Closing Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Stockholder or any Affiliate of the Stockholder. Stockholder
does not have any rights to acquire any additional shares of Common Stock.
Stockholder currently has with respect to the Existing Shares, and at Closing
will have with respect to the Shares, good, valid and marketable title, free and
clear of all liens, encumbrances, restrictions, options, warrants, rights to
purchase, voting agreements or voting trusts, and claims of every kind (other
than the encumbrances created by this Agreement and other than restrictions on
transfer under applicable Federal and State securities laws).
3.2 Power; Binding Agreement. Stockholder has the full legal right, power
------------------------
and authority to enter into and perform all of Stockholder's obligations under
this Agreement. The execution and delivery of this Agreement by Stockholder
will not violate any other agreement to which Stockholder is a party including,
without limitation, any voting agreement, stockholder agreement or voting trust.
This Agreement has been duly executed and delivered by Stockholder and
constitutes a legal, valid and binding agreement of Stockholder, enforceable in
accordance with its terms. Neither the execution or delivery of this Agreement
nor the consummation by Stockholder of the transactions contemplated hereby will
(a) require any consent or approval of or filing with any governmental or other
regulatory body other than filings required under the federal securities laws,
or (b) constitute a violation of, conflict with or constitute a default under,
any material contract, commitment, agreement, understanding, arrangement or
other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
3.3 Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fees from Stockholder in connection with this Agreement or the
transactions contemplated hereby exclusive of any commission or finder's fees
referred to in the Merger Agreement.
4. Representations and Warranties of Purchaser. Purchaser represents and
-------------------------------------------
warrants to Stockholder as follows:
4.1 Authority. Purchaser has full legal right, power and authority to
---------
enter into and perform all of its obligations under this Agreement. The
execution and delivery of this Agreement by Purchaser will not violate any other
agreement to which Purchaser is a party. This Agreement has been duly executed
and delivered by Purchaser and constitutes a legal, valid and binding agreement
of Purchaser, enforceable in accordance with its terms. Neither the execution
of this Agreement nor the consummation by Purchaser of the transactions
contemplated hereby will (a) require any consent or approval of or filing with
any governmental or other regulatory body other than filings required under the
federal securities laws, or (b) constitute a violation of, conflict with
-3-
<PAGE>
or constitute a default under, any material contract, commitment, agreement,
understanding, arrangement or other restriction of any kind to which Purchaser
is a party or by which it is bound.
4.2 Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fee from Purchaser in connection with this Agreement or the
transactions contemplated hereby exclusive of any commission or finder's fees
referred to in the Merger Agreement.
5. Termination. This Agreement shall terminate on the earliest of (a) the
-----------
Effective Time (as defined in the Merger Agreement), (b) the date immediately
following the termination of the Merger Agreement in accordance with its terms,
and (c) October 31, 1998; provided, however, the provisions of Sections 5 and 6
shall survive any termination of this Agreement, and the provisions of Sections
8.3, 8.4, 8.5, 8.7 and 9 shall survive the Effective Time if this Agreement
otherwise terminates at the Effective Time.
6. Expenses. Except as provided in Section 20, each party hereto will pay all
--------
of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers.
7. Confidentiality. Stockholder recognizes that successful consummation of
---------------
the transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to these matters. In this connection, pending
public disclosure, Stockholder agrees that it will not disclose or discuss these
matters with anyone (other than officers, directors, legal counsel and advisors
of the Stockholder or the Company, if any) not a party to this Agreement,
without prior written consent of Purchaser, except for filings required pursuant
to the Exchange Act, and the rules and regulations thereunder, or disclosures
Stockholder's legal counsel advises in writing are necessary in order to fulfill
Stockholder' s obligations imposed by law, in which event Stockholder shall give
prompt prior notice of such disclosure to Purchaser.
8. Covenants
---------
8.1 Except in accordance with the provisions of this Agreement,
Stockholder agrees, prior to the termination of this Agreement as provided in
Section 5 above, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares;
(b) grant any proxies, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or
(c) take any action to encourage, initiate or solicit any inquiries or
the making of any Acquisition Proposal (as defined in the Merger Agreement) or
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal or otherwise assist or facilitate any effort or attempt by any person
or entity (other than Purchaser and Purchaser Subsidiary, or their officers,
directors,
-4-
<PAGE>
representatives, agents, affiliates or associates) to make or implement an
Acquisition Proposal. Stockholder will immediately cease and cause to be
terminated any existing activities, discussions or negotiations on its part with
any parties conducted heretofore with respect to any of the foregoing, and will
notify Purchaser Subsidiary and Purchaser promptly if it becomes aware of any
such inquiries or that any proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
instituted or continued with, the Company (or its officers, directors,
representatives, agents, affiliates or associates), such notice to include the
material terms communicated; provided however, that the foregoing shall not
restrict the Stockholder or any of its representatives on the Company's board of
directors from taking actions to the same extent and only in the same
circumstances permitted for the Company and the Company's board of directors
under Section 5(g) of the Merger Agreement.
8.2 Stockholder agrees, while this Agreement is in effect, to notify
Purchaser promptly of the number of any shares of Common Stock acquired by
Stockholder after the date hereof.
8.3 Stockholder agrees that neither it nor any of its Affiliates (as such
term is defined in the Merger Agreement) will, directly or indirectly, unless in
any such case specifically invited in writing to do so by the board of directors
of Purchaser, for a period of 3 years from the date hereof, except as otherwise
expressly set forth in this Agreement or in the Merger Agreement: (i)
individually or together with one or more persons, acquire beneficial ownership,
offer to acquire or agree to acquire, or participate in the financing of any
acquisition of, beneficial ownership of any securities of Purchaser entitled to
vote in the general election of directors, or securities convertible into or
exercisable for such securities (collectively, "Securities"); (ii) initiate,
----------
propose, engage or otherwise participate in the solicitation of Stockholders or
their proxies for approval of one or more stockholder proposals (including,
without limitation, the election of directors, any amendment to the charter or
bylaws, or any Business Combination Transaction) with respect to Purchaser;
(iii) otherwise act alone or in concert with any other person to seek to
influence or control the management, Board of Directors, policies or affairs of
Purchaser, or to solicit, propose or encourage any other person with respect to
any form of Business Combination Transaction with Purchaser, or to solicit, make
or propose or encourage any other person with respect to, or announce an intent
to make, any tender offer or exchange offer for any Securities; (iv) request
Purchaser or its Board of Directors, officers, employees or agents, to amend or
waive, or seek any modification to, any provision of this Section 8.3; or (v)
take any action designed to or which can reasonably be expected to require
Purchaser to make a public announcement regarding any of the matters referred to
in this Section 8.3. Notwithstanding anything to the contrary contained herein,
the provisions of this Section 8.3 shall automatically terminate if the Merger
Agreement terminates in accordance with its terms without consummation of the
Merger. Notwithstanding anything to the contrary, the provisions of this Section
8.3 shall not be applicable to "Stockholder Affiliated Entities", or to any
portfolio company of the Stockholder or of any venture fund which is related to
the Stockholder, or to any representative or employee of the Stockholder or of
any related venture fund serving as a member of the board of directors on any
such portfolio company. The term "Stockholder Affiliated Entities" means a
registered broker-dealer and another affiliated entity of Stockholder that is a
registered investment adviser, as well as certain registered investment
companies that may be deemed to be Affiliates of the Stockholder.
-5-
<PAGE>
8.4 Stockholder agrees to provide Purchaser with reasonable notice prior
to the distribution of the Registrable Securities (as defined below) to its
general and limited partners.
8.5 At the effective time of the Merger, Purchaser agrees to cause the
board of directors of Purchaser ("Purchaser Board") to increase the number of
---------------
directors by one and take any other action to facilitate the nomination and
appointment of the Stockholder Nominee. Following such nomination and
appointment of the Stockholder Nominee, and continuing for so long as
Stockholder beneficially owns (which, for purposes of this Section 8.5 shall be
determined in accordance with Rule 13d-3 under the Exchange Act; provided, that
beneficial ownership shall be determined without reference to Shares which
Stockholder may acquire either (x) pursuant to the exercise of options,
warrants, or other rights to purchase Shares, or (y) pursuant to the conversion
or exchange of securities which are convertible or exchangeable into Shares) at
least 10% of the outstanding shares of common stock, par value $.01 per share,
of Purchaser ("Purchaser Common Stock"), Purchaser agrees to cause the
----------------------
nomination from time to time of the Stockholder Nominee to serve as a member of
the Purchaser Board and to submit the Stockholder Nominee to its stockholders
for election to the Purchaser Board, all in accordance with the procedures
applicable to the election of members of the Purchaser Board generally. As used
herein, "Stockholder Nominee" shall mean such person designated by Stockholder,
-------------------
and subject to the reasonable approval of the non-employee directors of the
Purchaser, to serve on the Purchaser Board.
8.6 No later than immediately prior to the Effective Time (as defined in
the Merger Agreement), Stockholder shall exercise the Warrant in full.
8.7 If, at any time after the Effective Time, the Executive enters into an
agreement with a Third Party purchaser (the "Third Party Purchaser") to sell all
---------------------
or any portion of his shares of common stock, par value $.01 per share (the
"Purchaser Shares"), other than Purchaser Shares to be sold pursuant to an
----------------
Excluded Transaction (as defined below), the Executive will make provision in
his agreement with the Third Party Purchaser pursuant to which the Stockholder
may sell to the Third Party Purchaser, at the same price and otherwise on
substantially the same terms and conditions as the Executive, its Proportionate
Share (as defined below) of the Purchaser Shares to be sold to the Third Party
Purchaser. The Executive will give written notice of the proposed transaction
at least 15 days prior to the proposed closing date and such notice shall
include the name and address of the Third Party Purchaser, the proposed closing
date and a reasonably detailed description of the terms and conditions pursuant
to which Stockholder may join in the proposed transaction. Within 10 days after
receipt of such notice, the Stockholder shall notify the Executive and the Third
Party Purchaser of the number of Purchaser Shares, up to a maximum of its
Proportionate Share, which it intends to sell, if any, to the Third Party
Purchaser and, at the election of the Third Party Purchaser, the number of
Purchaser Shares which it shall purchase either (a) shall be increased by up to
the number of Purchaser Shares sought to be sold by the Stockholder, and/or (b)
the number of shares which the Executive shall sell to the Third Party Purchaser
shall be decreased by up to that number of Purchaser Shares sought to be sold by
the Stockholder. As used herein, the Stockholder's "Proportionate Share" shall
-------------------
be determined by multiplying (i) the number of Purchaser Shares sought to be
sold to the Third Party Purchaser by (ii) the quotient of (A) the number of
Purchaser Shares beneficially owned by the Stockholder on the date the Executive
gave notice of the proposed transaction to the Stockholder, divided by (B) the
sum of (x) the number of
-6-
<PAGE>
Purchaser Shares beneficially owned by the Executive on the date it gave notice
of the proposed transaction to the Stockholder plus (y) the number of Purchaser
Shares beneficially owned by the Stockholder on the date the Executive gave
notice of the proposed transaction to the Stockholder. As used herein, the term
"Excluded Transaction" shall mean: (i) any sale of Purchaser Shares by the
--------------------
Executive effected in accordance with Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), or any successor rules or
--------------
regulations; (ii) any transfer of Purchaser Shares by the Executive, or the
grant of any right or interest therein, or any agreement to do any of the
foregoing, to the Executive's spouse, one or more of his lineal descendants,
siblings or the lineal descendants of his siblings, or a trust, custodian or
guardian for the benefit of one or more of such lineal decendants, siblings or
the lineal decendants of his siblings, provided, that, in the case of this
clause (ii), as a condition to such transfer, the transferee enters into a
written agreement to be bound by the terms and conditions of this Section 8.7;
(iii) to a foundation or other charitable organization established by or on
behalf of the Executive or his spouse; or (iv) the first 500,000 Purchaser
Shares transferred by the Executive after the date of this Agreement (it being
understood that if there shall occur any change in the Purchaser Shares by
reason of any stock dividend, extraordinary dividend or distribution, split-up,
recapitalization, combination, exchange of shares or the like, the number of
Purchaser Shares set forth in this clause (iv) shall be proportionally
adjusted).
9. Registration Rights.
-------------------
9.1 Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
"Commission" means the United States Securities and Exchange
----------
Commission or any other federal agency at the time administering the Securities
Act.
"Registrable Securities" means all the Purchaser Shares received by
----------------------
the Stockholder at the Effective Time, together with any additional Purchaser
Shares received by the Stockholder as a result of any stock dividend,
extraordinary dividend or distribution, split-up, recapitalization, combination,
exchange of shares or the like and involving the Purchaser Shares received by
the Stockholder at the Effective Time; provided, however, such securities shall
cease to be Registrable Securities when they become freely saleable to the
public under Rule 145(d) and Rule 144, without volume limitation, as the case
may be.
"Registration Expenses" means all expenses incurred by the Purchaser
---------------------
incident to the Purchaser's performance of this Section 9, including, without
limitation, all registration, filing and National Association of Securities
Dealers, Inc. fees, all listing fees, all fees and expenses of complying with
securities or blue sky laws (including, without limitation, reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), all printing expenses, the fees
and disbursements of counsel for the Purchaser and of the Purchaser's
independent public accountants, including the expenses of "comfort" letters, its
expenses incurred in connection with any "roadshow" presentations in which it
may participate and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities.
-7-
<PAGE>
"Selling Expenses" means all expenses incurred by the Stockholder
----------------
incident to the Stockholder's performance of this Section 9, including, without
limitation, all underwriting discounts and commissions, the fees and
disbursements of its advisors, including its counsel (other than the fees and
expenses of one counsel for the Stockholder) and its accountants, and its
expenses incurred in connection with any "roadshow" presentations in which it
may participate.
9.2 Requested Registration.
----------------------
(a) At such time as the Purchaser's obligations to register shares set
forth in that certain registration rights agreement dated as of July 31, 1996
between the Purchaser and Quantum Industrial Partners LDC, S-C Phoenix Holdings,
L.L.C., Winston Partners II LDC and Winston Partners II LLC (collectively, the
"Chaterjee Group") have terminated (the "Prior Agreement"), or the Purchaser
--------------- ---------------
otherwise amends, or obtains a waiver of, the Prior Agreement which permits the
granting of registration rights upon the request of the Stockholder, which the
Purchaser hereby agrees to use its commercially reasonable efforts to secure on
behalf of the Stockholder, upon the written request (the "Request") of the
-------
Stockholder, the Purchaser shall cause to be filed under the Securities Act a
registration statement on such form as selected by the Stockholder (with the
approval of the Purchaser, which shall not be unreasonably withheld) of all or
such portion of the Registrable Securities so requested by the Stockholder, and
the Purchaser shall take reasonable actions to effect, as soon as practicable,
subject to the reasonable cooperation of the Stockholder, within 120 days after
the Request is received from the Stockholders, the registration under the
Securities Act, of the Registrable Securities which the Purchaser has been so
requested to register by the Stockholder. Whenever the Purchaser shall effect a
registration pursuant to Section 9.2(a) which is an underwritten public offering
by the Stockholder of Registrable Securities, holders of securities of the
Purchaser who have "piggyback" registration rights may include all or a portion
of such securities in such registration, offering or sale; provided, however, if
the managing underwriter of any such public offering shall inform the Purchaser
by letter of its belief that the number or type of securities of the Purchaser
requested by holders of the securities of the Purchaser other than the
Stockholder to be included in such registration would materially and adversely
affect the underwritten public offering, then the Purchaser shall include in
such registration, to the extent of the number and type of securities which the
Purchaser is so advised can be sold in such Public Offering, first, all of the
Registrable Securities specified by the Stockholder in the Request and second,
for each holder of the Purchaser's securities other than the Stockholder, the
fraction of each holder's securities proposed to be registered which is obtained
by dividing (i) the number of the securities of the Purchaser that such holder
proposes to include in such registration by (ii) the total number of securities
proposed to be included in such registration by all holders other than the
Stockholder.
(b) Expenses. The Purchaser shall pay the Registration Expenses in
--------
connection with any registration effected pursuant to this Section 9.2 and the
Stockholder shall pay the Selling Expenses in connection with any registration
effected pursuant to this Section 9.2.
(c) Effective Registration Statement. Notwithstanding anything to the
--------------------------------
contrary herein, a registration requested pursuant to this Section 9.2 shall not
be deemed to have been effected unless a registration statement with respect
thereto has become effective and either remains continuously effective, without
interruption by any stop order for a period not to exceed the earlier
-8-
<PAGE>
of (i) 180 days following the effective date of such registration or (ii) the
date when the Purchaser Shares sought to be offered and sold pursuant thereto
are in fact offered and sold in accordance with the terms of such offering (the
"Effective Period").
----------------
(d) Selection of Underwriters. In connection with each underwritten
-------------------------
public offering effected pursuant to this Section 9.2, (a) the Purchaser shall
promptly select the managing underwriter subject to the approval of the
Stockholder, which approval shall not be unreasonably withheld, delayed or
conditioned by the Stockholder, and (b) if it so desires, the Stockholder may
promptly select the co-managing underwriter subject to the approval of the
Purchaser (which approval shall not be unreasonably withheld, delayed or
conditioned by the Purchaser).
(e) Limitations on Registration. The Purchaser shall not be required
---------------------------
to file a registration statement pursuant to this Section 9.2 which would become
effective within (i) 180 days following the effective date of a registration
statement (other than a registration statement filed on Form S-4 or S-8) filed
by the Purchaser with the Commission pertaining to any public offering for the
account of the Purchaser or another holder of securities of the Purchaser if the
Stockholder was afforded the opportunity to include at least 1,000,000 Purchaser
Shares (it being understood that if there shall occur any change in the Purchase
Shares by reason of any stock dividend, extraordinary dividend or distribution,
split-up, recapitalization, combination, exchange of shares or the like, the
number of Purchaser Shares set forth herein shall be proportionally adjusted) in
such registration pursuant to Section 9.3. In no event shall the Purchaser be
required to effect more than one (1) registration pursuant to Section 9.2.
Notwithstanding the foregoing, if, in the good faith determination of the
Purchaser's Board of Directors, a registration would adversely affect certain
activities of the Purchaser to the material detriment of the Purchaser, then the
Purchaser may at its option direct that such registration be delayed for a
period not in excess of 90 days in the aggregate from the date of the
Purchaser's receipt of the Request or from the first date upon which the
Purchaser is required to effect the registration contemplated by Section 9.2, as
applicable (the "Period of Delay").
---------------
9.3 Piggyback Registration.
----------------------
(a) Right to Include Registrable Securities. If the Purchaser at any
---------------------------------------
time proposes to register any of its securities under the Securities Act by
registration on Forms S- 1, S-2, S-3) or any successor or similar form(s)
(except registrations on such forms or similar forms solely for registration of
securities in connection with (i) an employee benefit plan or dividend
reinvestment plan or a merger or consolidation or (ii) debt securities which are
not convertible into Common Stock), whether or not for sale for its own account,
it shall each such time give written notice to the Stockholder of its intention
to do so at least 30 days prior to the anticipated filing date of a registration
statement with respect to such registration with the Commission. Upon the
written request of the Stockholder made as promptly as practicable and in any
event within 10 business days after the receipt of any such notice, which
request shall specify the Registrable Securities intended to be disposed of by
the Stockholder, the Purchaser shall use reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Purchaser has been so requested to register by the Stockholder; provided,
however, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
-9-
<PAGE>
statement filed in connection with such registration, the Purchaser shall
determine for any reason not to register or to delay registration of such
securities, the Purchaser may, at its election, give written notice of such
determination to the Stockholder and (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration, without prejudice, provided,
however, that the Stockholder may request that such registration be effected as
a registration under Section 9.2. hereof if such registration right was then
available to the Stockholder under Section 9.2 hereof) and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities. If an underwritten offering, any right of the Stockholder to
participate in a registration pursuant to this Section 9.3 shall be conditioned
upon it agreeing to offer and sell Registrable Securities in accordance with the
plan of distribution applicable to the other Purchaser Shares sought to be
offered and sold in such registration.
(b) Expenses. The Purchaser shall pay the Registration Expenses in
--------
connection with any registration effected pursuant to this Section 9.3 and the
Stockholder shall pay the Selling Expenses in connection with any registration
effected pursuant to this Section 9.3.
(c) Selection of Underwriters and Form of Registration Statement. In
------------------------------------------------------------
connection with each public offering effected pursuant to this Section 9.3, the
Purchaser shall promptly select the managing underwriters, if any, and the form
of registration statement to be used in connection with any such offering.
(d) Priority in Piggyback Registrations. Notwithstanding anything in
-----------------------------------
Section 9.3 above to the contrary, if the managing underwriter of any
underwritten public offering shall inform the Purchaser by letter of its belief
that the number or type of Registrable Securities requested to be included in
such registration would materially and adversely affect such public offering,
then the Purchaser shall promptly notify the Stockholder of such fact. If the
managing underwriter does not agree to include all (or such lesser amount as the
Stockholder shall, in its discretion, agree to) of the number of the Registrable
Securities initially requested by the Stockholder to be included in such
registration, then the Purchaser shall include in such registration, to the
extent of the number and type which the Purchaser is so advised can be sold in
such Public Offering, (i) first, the Purchaser Shares proposed to be sold by
Purchaser; (ii) second, to the extent additional Purchaser Shares may be
included, the Purchaser Shares proposed to be sold by any members of the
Chaterjee Group, or any of their respective affiliates or transferees, and (iii)
third, to the extent additional Purchaser Shares may be included, the
Registrable Securities sought to be sold by the Stockholder. In the event that
the proposed registration by Purchaser is pursuant to a contractual demand
registration right, the sale of Purchaser Shares by such party making the demand
or by any member of the Chaterjee Group shall have priority over the sale of the
Registrable Securities.
-10-
<PAGE>
9.4 Shelf Registration.
------------------
(a) Filing of Shelf Registration. At such time as the Purchaser's
----------------------------
obligations to register shares set forth in the Prior Agreement have terminated,
or the Purchaser otherwise amends, or obtains a waiver of, the Prior Agreement
which permits the granting of registration rights upon the request of the
Stockholder, which the Purchaser hereby agrees to use its commercially
reasonable efforts to secure on behalf of the Stockholder, upon the written
request of the Stockholder, the Purchaser shall cause to be filed under the
Securities Act a registration statement on Form S-2 or S-3, as selected by the
Purchaser, for a shelf registration pursuant to Rule 415 pursuant to the
Securities Act (the "Shelf Registration") relating to all or such portion of the
------------------
Registrable Securities so requested by the Stockholder, and the Purchaser shall
take reasonable actions to effect, as soon as practicable, subject to the
reasonable cooperation of the Stockholder, within 90 days after the request to
file a Shelf Registration is received from the Stockholder, such registration
under the Securities Act, of the Registrable Securities which the Purchaser has
been so requested to register by the Stockholder. The obligations of the
Purchaser to file a registration statement relating to a Shelf Registration for
Registrable Securities may be exercised on not more than two occasions. The
obligations set forth above in this subsection (a) shall terminate on the date
which is two years from the Effective Time of the Merger. The Company shall use
its best efforts to maintain its eligibility to use Form S-2 or S-3 for
secondary offerings.
(b) Period of Delay. The Purchaser shall not be obligated to effect
---------------
the filing of a registration statement pursuant to this Section 9.4 if, at the
time of any request to register Registrable Securities pursuant to this Section
9.4, the Purchaser is preparing, or within 30 days thereafter engages a managing
underwriter and commences to prepare, a registration statement for a primary
public offering (other than a registration effected solely to implement an
employee benefit plan) by the Purchaser (a "Purchaser Offering"), or is engaged
------------------
in any material acquisition or divestiture or other business transaction with a
third party which, in the good faith opinion of the board of directors of the
Purchaser, would be adversely affected by the Shelf Registration (a "Material
--------
Purchaser Transaction"), in which event the Purchaser may at its option by
- ---------------------
written notice to the Stockholder direct that the obligation to commence the
preparation and filing of such Shelf Registration be delayed for a period of 45
days from the date of such request or, if during such 45-day period the
Purchaser files a registration statement with respect to a Purchaser Offering,
then until such date that is 90 days after the effective date of such
registration statement. Additionally, if the Purchaser has filed and the
Commission has declared effective any registration statement pursuant to this
Section 9.4, and thereafter the Purchaser commences to prepare, or engages a
managing underwriter and commences to prepare, a registration statement for a
Purchaser Offering, or is engaged in any Material Purchaser Transaction, then
the Purchaser may at its option by written notice to the Stockholder direct that
no Registrable Securities be distributed pursuant to the Shelf Registration for
a period of 45 days from the date of such notice to the Stockholder or, if
during such 45-day period, the Purchaser files a registration statement with
respect to a Purchaser Offering, 90 days after the effective date of such
registration statement.
(c) Expenses and Effective Period. The Purchaser shall pay the
-----------------------------
Registration Expenses in connection with any registration effected pursuant to
this Section 9.4 and the
-11-
<PAGE>
Stockholder shall pay the Selling Expenses in connection with any registration
effected pursuant to this Section 9.4. The Purchaser shall use reasonable
efforts to maintain the effectiveness of any registration statement relating to
the Shelf Registration until the distribution of the Registrable Securities
subject thereto, but in no event beyond 2 years after the Effective Time of the
Merger.
(a) Limitation on Distribution Pursuant to Shelf Registration. The
---------------------------------------------------------
Stockholder shall not knowingly distribute through the Shelf Registration, to
any one beneficial holder, whether in one transaction or in a series of related
transactions, more than 3.5% of the then outstanding Purchaser Shares.
9.5 Registration Procedures.
-----------------------
(a) In connection with the registration of any Registrable Securities
under the Securities Act as provided in Sections 9.2, 9.3 or 9.4, the Purchaser
shall as promptly as practicable:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use reasonable
efforts to cause such registration statement to become and remain effective;
(ii) use reasonable efforts to prepare and file with the
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
such registration statement for the applicable effective period;
(iii) furnish to the Stockholder such number of conformed copies
of such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act;
(iv) use reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or Blue Sky laws of such States of the
United States of America where an exemption is not available and as the
Stockholder shall reasonably request; provided, however, that the Purchaser
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this paragraph (iv), be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(v) notify the Stockholder when a prospectus relating thereto
is required to be delivered under the Securities Act and, upon discovery that
there has occurred any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, in the light
of the circumstances under
-12-
<PAGE>
which they were made, and at the request of the Stockholder use its best efforts
to promptly prepare and furnish to the Stockholder such number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made;
(vi) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the Commission, and, except in the case of a
Shelf Registration, make available to its security-holders, as soon as
reasonably practicable, an earnings statement meeting the requirements of
Section 11(a) of the Securities Act, which the Purchaser shall be entitled to
satisfy by complying with the requirements of Rule 158 promulgated thereunder,
and promptly furnish a copy of the same to the Stockholder;
(vii) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement;
(viii) use reasonable efforts to list all Registrable Securities
covered by such registration statement on any national securities exchange or
over-the-counter market, if any, on which Registrable Securities of the same
class, and if applicable, series, covered by such registration statement are
then listed; and
(ix) subject to customary confidentiality obligations, the
Purchaser shall permit reasonable access to the Stockholder and its counsel and
other advisors to its financial statements and its other books and records to
permit the Stockholder to perform reasonable due diligence.
The Stockholder agree that upon receipt of any notice from the
Purchaser of the happening of an event of the kind described in Section 9.4(v),
the Stockholder shall forthwith discontinue its disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until the Stockholder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 9.4(v).
9.6 Underwritten Offerings. If requested by the underwriters for any
----------------------
underwritten public offering by the Stockholder pursuant to a registration
requested under Section 9.2 or 9.3, the Purchaser shall enter into an
underwriting agreement with such underwriters for such public offering, such
agreement to be reasonably satisfactory in substance and form to the Purchaser,
the Stockholder and the underwriters, and to contain such representations and
warranties by the Purchaser and the Stockholder and such other terms as are
generally prevailing in agreements of that type, including, without limitation,
customary indemnities and contribution provisions generally prevailing in
agreements of that type. The Stockholder shall cooperate with the Purchaser in
the negotiation of the underwriting agreement and shall give consideration to
the reasonable suggestions of the Purchaser regarding the form and substance
thereof. The Stockholder shall be a party to such underwriting agreement.
-13-
<PAGE>
9.7 Holdback Agreements. The Stockholder agrees that, upon the request of
-------------------
and to the extent required by the underwriter(s) managing any registration of
Purchaser Shares under the Securities Act by the Purchaser or by any member of
the Chaterjee Group (except to the extent the Stockholder is participating as a
selling securityholder pursuant to this Agreement), it will not, without the
prior written consent of such underwriters, during the 7-day period prior to,
and during the 90-day (180-days in the case of a registration effected by the
Chaterjee Group) period beginning on, the effective date of such registration,
sell, make any short sale of, pledge, grant any option for the purchase of or
otherwise dispose of, or enter into any other hedging or similar transaction
with respect to, any Purchaser Shares, or any securities convertible into or
exchangeable for Purchaser Shares. The provisions of this Section 9.7 shall not
be cumulative with the provisions of Section 9.4 (b) hereof.
9.8 Indemnification and Contribution.
--------------------------------
(a) Indemnification by the Purchaser. In the event of any
--------------------------------
registration of any securities of the Purchaser under the Securities Act in
which the Stockholder is a selling shareholder, the Purchaser shall, and hereby
does, indemnify and hold harmless, in the case of any registration statement
filed pursuant to this Section 9, the Stockholder's directors, officers,
partners, employees, agents and affiliates and, to the extent required by any
underwriting agreement entered into by the Purchaser, each other person who
participates as an underwriter in the registration statement and each other
person who controls the Stockholder or any such underwriter within the meaning
of the Securities Act, insofar as losses, claims, damages, or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any fact contained in any registration statement under which such securities
were registered under the Securities Act, any preliminary prospectus, final
prospectus, or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances in which thy were made not misleading, and the
Purchaser shall reimburse the Stockholder and each such director, officer,
partner, employee, agent or affiliate and, to the extent required by an
underwriting agreement entered into by the Purchaser, any underwriter and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding described in this clause (a); provided, however,
that the Purchaser shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Purchaser by or on behalf of the Stockholder specifically stating that it is for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Stockholder or any such director, officer, agent or affiliate
or controlling person and shall survive the transfer of such securities by the
Stockholder.
-14-
<PAGE>
(b) Indemnification by the Stockholder. If any Registrable Securities
----------------------------------
are included in any registration statement, the Stockholder shall indemnify and
hold harmless (in the same manner and to the same extent as set forth in
subsection (a) above) the Purchaser, each director of the Purchaser, each
officer of the Purchaser and each employee of the Purchaser and, to the extent
required by any underwriting agreement entered into by the Stockholder, each
other person who participates as an underwriter in the registration statement or
sale of such securities and each other person who controls any such underwriter
within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Purchaser by or on
behalf of the Stockholder specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; provided, however, in
no event shall the liability of any Stockholder under this subsection(b) exceed
the proceeds obtained by the sale of such Stockholder's Registrable Securities
in any such registration.
(c) Notice of Claims, Etc. Promptly after receipt, by an indemnified
----------------------
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections (a) and (b), such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party, immediately give written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 9.8, except to the
extent that the indemnifying party is prejudiced by such failure. The
indemnified party shall be entitled to receive the indemnification payments
described herein after providing such written notice to the indemnifying party.
In case any such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. Each indemnified
party shall furnish such information regarding itself or the claim in question
as an indemnifying party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and litigation
resulting therefrom. No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent, which shall not
be unreasonably withheld, delayed or conditioned. Consent of the indemnified
party shall be required for the entry of any judgment or to enter into a
settlement only when such judgment or settlement does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect such claim or
litigation.
(d) Contribution. If the indemnification provided for in this Section
------------
9.8 shall for any reason be held by a court to be unavailable to an indemnified
party in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under Sections
9.8(a) and 9.8(b) hereof, the indemnified party and the indemnifying party shall
contribute
-15-
<PAGE>
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating the same) in
such proportion as is appropriate to reflect the relative fault of the Purchaser
on one hand and the Stockholder on the other that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations or, if the allocation provided above is not permitted
by applicable law, in such proportion as shall be appropriate to reflect the
relative benefits received by the Purchaser on one hand and the Stockholder on
the other. No Person guilty of fraudulent misrepresentation (within the meaning
of the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any settlement of
any action or claim, effected without such Person's written consent, which
consent shall not be unreasonably withheld; provided, however, in no event shall
the liability of any Stockholder under this subsection exceed the proceeds
obtained by the sale of such Stockholder's Registrable Securities in any such
registration.
10. Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Stockholder or Purchaser in this
Agreement shall survive the Closing hereunder and any investigation at any time
made by or on behalf of any party.
11. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing (except as otherwise provided herein), given in
the manner provided in the Merger Agreement, and shall be deemed duly given when
received, addressed as follows:
If to Purchaser:
Primus Telecommunications Group, Inc.
2070 Chain Bridge Road
Vienna, VA 22102
Attention: K. Paul Singh, Chairman and CEO
Facsimile: (703) 902-2814
With a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esq.
Facsimile: (215) 981-4750
If to Stockholder:
-16-
<PAGE>
Warburg, Pincus Investors, L.P.
E.M. Warburg, Pincus & Co., LLC
466 Lexington Avenue, 10th Floor
New York, New York 10017
Attention: Doug Karp
Facsimile: (212) 878-6162
With a copy to:
Wilkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677
Attention: Jack H. Nusbaum, Esq.
Facsimile: (212) 821-8111
12. Entire Agreement; Amendment. This Agreement, together with the documents
---------------------------
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter. This Agreement may not be modified, amended, altered or
supplemented except by an agreement in writing executed by Purchaser and
Stockholder.
13. Assigns. This Agreement shall be binding upon and inure to the benefit of
-------
the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
14. Governing Law. Except as expressly set forth below, this Agreement shall
-------------
be governed by and construed in accordance with the laws of the State of
Florida, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. In addition, each of the Stockholder
and Purchaser hereby agree that any dispute arising out of this Agreement shall
be heard in the appropriate court of the State of Florida or in the United
States District Court for the Southern District of Florida and, in connection
therewith, each party to this Agreement hereby consents to the jurisdiction of
such courts and agrees that any service of process in connection with any
dispute arising out of this Agreement may be given to any other party hereto by
certified mail, return receipt requested, at the respective addresses set forth
in Section 10 above.
15. Injunctive Relief. The parties agree that in the event of a breach of any
-----------------
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining such relief, the
-17-
<PAGE>
aggrieved party will not be precluded from seeking or obtaining any other relief
to which it may be entitled.
16. Counterparts; Facsimile Signatures. This Agreement may be executed,
----------------------------------
including execution by facsimile, in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same document.
17. Severability. Any term or provision of this Agreement which is invalid or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
18. Further Assurances. Each party hereto shall execute and deliver such
------------------
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
19. Third Party Beneficiaries. Nothing in this Agreement, expressed or
-------------------------
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
-18-
<PAGE>
IN WITNESS WHEREOF, the Purchaser and the Stockholder have caused this
Agreement to be executed by their duly authorized officers, and the Executive
has duly executed this Agreement, each as of the date and year first above
written.
Primus Telecommunications Group, Inc.
By: /s/ K. Paul Singh
----------------------------------------
Name: K. Paul Singh
Title: President and Chief Executive Officer
Taurus Acquisition Corporation
By: /s/ K. Paul Singh
----------------------------------------
Name: K. Paul Singh
Title: President
Warburg, Pincus, Investors, L.P.
By: Warburg, Pincus & Co., general partner
By: ____________________________________
Name:
Title:
As to Section 8.7 only:
/s/ K. Paul Singh
-----------------------------------------------
K. Paul Singh
<PAGE>
IN WITNESS WHEREOF, the Purchaser and the Stockholder have caused this
Agreement to be executed by their duly authorized officers, and the Executive
has duly executed this Agreement, each as of the date and year first above
written.
Primus Telecommunications Group, Inc.
By: ________________________________________
Name: K. Paul Singh
Title: President and Chief Executive Officer
Taurus Acquisition Corporation
By: ________________________________________
Name: K. Paul Singh
Title: President
Warburg, Pincus, Investors, L.P.
By: Warburg, Pincus & Co., general partner
By: /s/ Doug Karp
------------------------------------
Name:
Title:
As to Section 8.7 only:
_______________________________________________
K. Paul Singh
<PAGE>
Exhibit 3
---------
VOTING AGREEMENT
----------------
AGREEMENT dated as of February 3, 1998 by and among the person
identified as a Shareholder of TRESCOM INTERNATIONAL, INC., a Florida
corporation (the "Company"), on the signature page below (the "Shareholder") and
------- -----------
PRIMUS TELECOMMUNICATIONS GROUP, INC., a Delaware corporation (the "Purchaser").
---------
WHEREAS, the Shareholder owns, as of the date hereof, 220,032 shares
of Common Stock (the "Existing Shares", together with any shares of common
---------------
stock, par value $.0419 per share, of the Company (the "Common Stock"), acquired
------------
after the date hereof and prior to the termination hereof (including shares of
Common Stock acquired pursuant to the exercise of employee stock options issued
by the Company (the "Options")), hereinafter collectively referred to as the
-------
"Shares");
- -------
WHEREAS, concurrently herewith, the Company and Purchaser are entering
into an Agreement and Plan of Merger (the "Merger Agreement") for the merger of
----------------
a subsidiary of the Company with and into the Company (the "Merger");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, and in reliance upon Shareholder's representations, warranties,
covenants and agreements hereunder, the Purchaser has requested that the
Shareholder agree, and the Shareholder has agreed, to enter into this Agreement;
WHEREAS, to induce the Purchaser to enter into the Merger Agreement,
the Shareholder is willing to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for such other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, it is agreed as follows:
1. Agreement to Vote. The Shareholder hereby agrees that, except as expressly
-----------------
set forth below, during the time this Agreement is in effect, at any meeting of
the stockholders of the Company, however called, and in any action by consent of
the stockholders of the Company, the Shareholder shall: (a) vote the Shares in
favor of the Merger; (b) vote the Shares against any action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement; (c)
vote the Shares against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger including, but not
limited to, (i) any extraordinary corporate transaction (other than the Merger),
such as a merger, other business combination, reorganization or liquidation
involving the Company, (ii) a sale or transfer of a material amount of assets of
the Company or any of its Subsidiaries, (iii) any change in the management or
board of directors of the Company, except as otherwise agreed to in writing by
the Purchaser, (iv) any material change in the present capitalization of the
Company, or (v) any other material change in the corporate
<PAGE>
structure or business of the Company; and (d) without limiting the foregoing,
consult with the Purchaser prior to any such vote and vote such Shares in such
manner as is determined by the Purchaser to be in compliance with the provisions
of this Section 1. The Shareholder acknowledges receipt and review of a copy of
the Merger Agreement. In furtherance thereof, the Shareholder hereby grants to
the Purchaser an irrevocable proxy to vote the Shares in accordance with the
terms and conditions of this Agreement, it being understood that such proxy is
coupled with an interest. Notwithstanding the foregoing, if the Board of
Directors of the Company enters into an agreement with another person or entity
to effect a Superior Offer (as defined in the Merger Agreement), and the Company
is not otherwise in violation of its obligations under Section 5(g) of the
Merger Agreement, then the obligations of the Shareholder set forth in this
Section 1, and the proxy granted by this Section 1, may be terminated by the
Shareholder.
2. Representations and Warranties of the Shareholder. The Shareholders
-------------------------------------------------
represents and warrants to the Purchaser as follows:
2.1. Ownership of Shares. On the date hereof the Existing Shares are all
-------------------
of the Shares currently beneficially owned (which, for purposes of this
Agreement shall be determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided, that beneficial
ownership shall be determined solely with reference to Shares over which such
person has voting power as described in subsection (a)(1) of such Rule) by the
Shareholder or any Affiliate (as defined in the Merger Agreement) of the
Shareholder. On the Closing Date (as defined in the Merger Agreement), the
Shares will constitute all of the shares of Common Stock owned beneficially by
the Shareholder or any Affiliate of the Shareholder. The Shareholder does not
have any rights to acquire any additional shares of Common Stock. The
Shareholder currently has with respect to the Existing Shares, and at Closing
will have with respect to the Shares, good, valid and marketable title, free and
clear of all liens, encumbrances, restrictions, options, warrants, rights to
purchase, voting agreements or voting trusts, and claims of every kind (other
than the encumbrances created by this Agreement and other than restrictions on
transfer under applicable Federal and State securities laws).
2.2. Power; Binding Agreement. The Shareholder has the full legal right,
------------------------
power and authority to enter into and perform all of the Shareholder's
obligations under this Agreement. The execution and delivery of this Agreement
by the Shareholder will not violate any other agreement to which the Shareholder
is a party including, without limitation, any voting agreement, stockholder's
agreement or voting trust. This Agreement has been duly executed and delivered
by the Shareholder and constitutes a legal, valid and binding agreement of the
Shareholder, enforceable in accordance with its terms. Neither the execution or
delivery of this Agreement, nor the consummation by the Shareholder of the
transactions contemplated hereby, will (a) require any consent or approval of or
filing with any governmental or other regulatory body, or (b) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of' any
kind to which the Shareholder is a party or by which the Shareholder is bound.
-2-
<PAGE>
2.3. Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fees from the Shareholder in connection with this Agreement or the
transactions contemplated hereby, exclusive of any commission or finder's fees
referred to in the Merger Agreement.
3. Representations and Warranties of the Purchaser. The Purchaser represents
-----------------------------------------------
and warrants to the Shareholder as follows:
3.1. Authority. The Purchaser has full legal right, power and authority to
---------
enter into and perform all of its obligations under this Agreement. The
execution and delivery of this Agreement by the Purchaser will not violate any
other agreement to which the Purchaser is a party. This Agreement has been duly
executed and delivered by the Purchaser and constitutes a legal, valid and
binding agreement of the Purchaser, enforceable in accordance with its terms.
Neither the execution of this Agreement nor the consummation by the Purchaser of
the transactions contemplated hereby will (a) require any consent or approval of
or filing with any governmental or other regulatory body, or (b) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which the Purchaser is a party or by which it is bound.
3.2. Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fee from the Purchaser in connection with this Agreement or the
transactions contemplated hereby, exclusive of any commission or finder's fees
referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of Sections 5 and
-----------
6, which shall survive any termination of this Agreement) shall terminate on the
earliest of (a) the Effective Time (as defined in the Merger Agreement), (b) the
date immediately following the termination of the Merger Agreement in accordance
with its terms, and (c) October 31, 1998. the foregoing is in addition to the
termination rights of the Shareholder set forth in Section 1 above.
5. Expenses. Except as provided in Section 18, each party hereto will pay all
--------
of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers.
6. Confidentiality. The Shareholder recognizes that successful consummation
---------------
of the transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to these matters. In this connection, pending
public disclosure, the Shareholder agrees that it will not disclose or discuss
these matters with anyone (other than officers, directors, legal counsel and
advisors of the Shareholder, the Purchaser or the Company) not a party to this
Agreement, without prior written consent of the Purchaser, except for filings
required pursuant to the Exchange Act, and the rules and regulations thereunder,
or disclosures which the Shareholder's legal counsel advises in writing are
necessary in order to fulfill the Shareholder's obligations imposed by law, in
which event the Shareholder shall give prompt prior notice of such disclosure to
the Purchaser.
-3-
<PAGE>
7. Certain Covenants of the Shareholder.
------------------------------------
7.1. Except in accordance with the provisions of this Agreement, the
Shareholder agrees, prior to the termination of this Agreement as provided in
Section 4 above, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares; or
(b) grant any proxies, deposit any Shares into a voting trust or
enter into a voting agreement with respect to any Shares; or
(c) take any action to encourage, initiate or solicit any inquiries
or the making of any Acquisition Proposal (as defined in the Merger Agreement),
engage in any negotiations concerning or provide any confidential information or
data to, or have any discussions with, any person or entity relating to an
Acquisition Proposal, or otherwise assist or facilitate any effort or attempt by
any person or entity (other than the Company, or their officers, directors,
representatives, agents, affiliates or associates) to make or implement an
Acquisition Proposal. The Shareholders will immediately cease and cause to be
terminated any existing activities, discussions or negotiations on its part with
any parties conducted heretofore with respect to any of the foregoing, and will
notify the Company promptly if they become aware of any such inquiries or that
any proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be instituted or continued with,
the Company (or its officers, directors, representatives, agents, affiliates or
associates), such notice to include the material terms communicated.
7.2. The Shareholder agrees, while this Agreement is in effect, to notify
the Purchaser promptly of the number of any shares of Common Stock acquired by
the Shareholder after the date hereof.
8. Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by the Shareholder or the Purchaser in
this Agreement shall survive regardless of any investigation at any time made
by or on behalf of any party.
-4-
<PAGE>
9. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing (except as otherwise provided herein), given in
the manner provided in the Merger Agreement, and shall be deemed duly given when
received, addressed as follows:
If to the Purchaser:
Primus Telecommunications Group, Inc.
2070 Chain Bridge Road
Vienna, VA 22102
Attention: K. Paul Singh, Chairman and CEO
Facsimile: (703) 902-2814
With a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esquire
Facsimile: (215) 981-4750
If to the Shareholder:
c/o TresCom International, Inc.
200 East Broward Blvd.
Ft. Lauderdale, FL 33301
Facsimile: (954) 463-4353
With a copy to:
Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3229
Fax: (203) 351-8115
Attention: John T. Capetta, Esq.; or
10. Entire Agreement; Amendment. This Agreement, together with the documents
---------------------------
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter. This Agreement may not be modified, amended,
-5-
<PAGE>
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought to
be enforced.
11. Assigns. This Agreement shall be binding upon and inure to the benefit of
-------
the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
12. Governing Law. Except as expressly set forth below, this Agreement shall
-------------
be governed by and construed in accordance with the laws of the State of
Florida, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. In addition, each of the Shareholders
and the Purchaser hereby agree that any dispute arising out of this Agreement or
the Merger shall be heard in the primary trial court of the State of Florida or
in the United States District Court for the Southern District of Florida and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement or the Merger may be given to any
other party hereto by certified mail, return receipt requested, at the
respective addresses set forth in Section 9 above.
13. Injunctive Relief. The parties agree that in the event of a breach of any
-----------------
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
14. Counterparts; Facsimile Signatures. This Agreement may be executed,
----------------------------------
including execution by facsimile, in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same document.
15. Severability. Any term or provision of this Agreement which is invalid or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
16. Further Assurances. Each party hereto shall execute and deliver such
------------------
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
-6-
<PAGE>
17. Third Party Beneficiaries. Nothing in this Agreement, expressed or
-------------------------
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
18. Legal Expenses. In the event any legal proceeding is commenced by any
--------------
party to this Agreement to enforce or recover damages for any breach of the
provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees.
19. Amendment and Modification. This Agreement may be amended, modified and
--------------------------
supplemented by a written document executed by the Purchaser and the
Shareholder.
[Remainder of Page Intentionally Left Blank]
-7-
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be
executed by its duly authorized officers, and the Shareholders have duly
executed this Agreement, each as of the date and year first above written.
PURCHASER:
PRIMUS TELECOMMUNICATIONS GROUP, INC.
By: /s/ K Paul Singh
----------------------------------------
K. Paul Singh, Chief Executive Officer
SHAREHOLDER:
____________________________________________
Wesley T. O'Brien
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be
executed by its duly authorized officers, and the Shareholders have duly
executed this Agreement, each as of the date and year first above written.
PURCHASER:
PRIMUS TELECOMMUNICATIONS GROUP, INC.
By:________________________________________
K. Paul Singh, Chief Executive Officer
SHAREHOLDER:
/s/ Wesley T. O'Brien
--------------------------------------------
Wesley T. O'Brien
<PAGE>
Exhibit 4
---------
VOTING AGREEMENT
----------------
AGREEMENT dated as of February 3, 1998 by and among the person
identified as a Shareholder of TRESCOM INTERNATIONAL, INC., a Florida
corporation (the "Company"), on the signature page below (the "Shareholder") and
------- -----------
PRIMUS TELECOMMUNICATIONS GROUP, INC., a Delaware corporation (the "Purchaser").
---------
WHEREAS, the Shareholder owns, as of the date hereof, 30,595 shares of
Common Stock (the "Existing Shares", together with any shares of common stock,
---------------
par value $.0419 per share, of the Company (the "Common Stock"), acquired after
------------
the date hereof and prior to the termination hereof (including shares of Common
Stock acquired pursuant to the exercise of employee stock options issued by the
Company (the "Options")), hereinafter collectively referred to as the "Shares");
------- ------
WHEREAS, concurrently herewith, the Company and Purchaser are entering
into an Agreement and Plan of Merger (the "Merger Agreement") for the merger of
----------------
a subsidiary of the Company with and into the Company (the "Merger");
------
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, and in reliance upon Shareholder's representations, warranties,
covenants and agreements hereunder, the Purchaser has requested that the
Shareholder agree, and the Shareholder has agreed, to enter into this Agreement;
WHEREAS, to induce the Purchaser to enter into the Merger Agreement,
the Shareholder is willing to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for such other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, it is agreed as follows:
1. Agreement to Vote. The Shareholder hereby agrees that, except as expressly
-----------------
set forth below, during the time this Agreement is in effect, at any meeting of
the stockholders of the Company, however called, and in any action by consent of
the stockholders of the Company, the Shareholder shall: (a) vote the Shares in
favor of the Merger; (b) vote the Shares against any action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement; (c)
vote the Shares against any action or agreement that would impede, interfere
with, delay, postpone or attempt to discourage the Merger including, but not
limited to, (i) any extraordinary corporate transaction (other than the Merger),
such as a merger, other business combination, reorganization or liquidation
involving the Company, (ii) a sale or transfer of a material amount of assets of
the Company or any of its Subsidiaries, (iii) any change in the management or
board of directors of the Company, except as otherwise agreed to in writing by
the Purchaser, (iv) any material change in the present capitalization of the
Company, or (v) any other material change in the corporate
<PAGE>
structure or business of the Company; and (d) without limiting the foregoing,
consult with the Purchaser prior to any such vote and vote such Shares in such
manner as is determined by the Purchaser to be in compliance with the provisions
of this Section 1. The Shareholder acknowledges receipt and review of a copy of
the Merger Agreement. In furtherance thereof, the Shareholder hereby grants to
the Purchaser an irrevocable proxy to vote the Shares in accordance with the
terms and conditions of this Agreement, it being understood that such proxy is
coupled with an interest. Notwithstanding the foregoing, if the Board of
Directors of the Company enters into an agreement with another person or entity
to effect a Superior Offer (as defined in the Merger Agreement), and the Company
is not otherwise in violation of its obligations under Section 5(g) of the
Merger Agreement, then the obligations of the Shareholder set forth in this
Section 1, and the proxy granted by this Section 1, may be terminated by the
Shareholder.
2. Representations and Warranties of the Shareholder. The Shareholders
-------------------------------------------------
represents and warrants to the Purchaser as follows:
2.1. Ownership of Shares. On the date hereof the Existing Shares are all
-------------------
of the Shares currently beneficially owned (which, for purposes of this
Agreement shall be determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); provided, that beneficial
ownership shall be determined solely with reference to Shares over which such
person has voting power as described in subsection (a)(1) of such Rule) by the
Shareholder or any Affiliate (as defined in the Merger Agreement) of the
Shareholder. On the Closing Date (as defined in the Merger Agreement), the
Shares will constitute all of the shares of Common Stock owned beneficially by
the Shareholder or any Affiliate of the Shareholder. The Shareholder does not
have any rights to acquire any additional shares of Common Stock. The
Shareholder currently has with respect to the Existing Shares, and at Closing
will have with respect to the Shares, good, valid and marketable title, free and
clear of all liens, encumbrances, restrictions, options, warrants, rights to
purchase, voting agreements or voting trusts, and claims of every kind (other
than the encumbrances created by this Agreement and other than restrictions on
transfer under applicable Federal and State securities laws).
2.2. Power; Binding Agreement. The Shareholder has the full legal right,
------------------------
power and authority to enter into and perform all of the Shareholder's
obligations under this Agreement. The execution and delivery of this Agreement
by the Shareholder will not violate any other agreement to which the Shareholder
is a party including, without limitation, any voting agreement, stockholder's
agreement or voting trust. This Agreement has been duly executed and delivered
by the Shareholder and constitutes a legal, valid and binding agreement of the
Shareholder, enforceable in accordance with its terms. Neither the execution or
delivery of this Agreement, nor the consummation by the Shareholder of the
transactions contemplated hereby, will (a) require any consent or approval of or
filing with any governmental or other regulatory body, or (b) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of' any
kind to which the Shareholder is a party or by which the Shareholder is bound.
-2-
<PAGE>
2.3. Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fees from the Shareholder in connection with this Agreement or the
transactions contemplated hereby, exclusive of any commission or finder's fees
referred to in the Merger Agreement.
3. Representations and Warranties of the Purchaser. The Purchaser represents
-----------------------------------------------
and warrants to the Shareholder as follows:
3.1. Authority. The Purchaser has full legal right, power and authority to
---------
enter into and perform all of its obligations under this Agreement. The
execution and delivery of this Agreement by the Purchaser will not violate any
other agreement to which the Purchaser is a party. This Agreement has been duly
executed and delivered by the Purchaser and constitutes a legal, valid and
binding agreement of the Purchaser, enforceable in accordance with its terms.
Neither the execution of this Agreement nor the consummation by the Purchaser of
the transactions contemplated hereby will (a) require any consent or approval of
or filing with any governmental or other regulatory body, or (b) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which the Purchaser is a party or by which it is bound.
3.2. Finder's Fees. No person is, or will be, entitled to any commission
-------------
or finder's fee from the Purchaser in connection with this Agreement or the
transactions contemplated hereby, exclusive of any commission or finder's fees
referred to in the Merger Agreement.
4. Termination. This Agreement (other than the provisions of Sections 5 and
-----------
6, which shall survive any termination of this Agreement) shall terminate on the
earliest of (a) the Effective Time (as defined in the Merger Agreement), (b) the
date immediately following the termination of the Merger Agreement in accordance
with its terms, and (c) October 31, 1998. the foregoing is in addition to the
termination rights of the Shareholder set forth in Section 1 above.
5. Expenses. Except as provided in Section 18, each party hereto will pay all
--------
of its expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its counsel
and other advisers.
6. Confidentiality. The Shareholder recognizes that successful consummation
---------------
of the transactions contemplated by this Agreement may be dependent upon
confidentiality with respect to these matters. In this connection, pending
public disclosure, the Shareholder agrees that it will not disclose or discuss
these matters with anyone (other than officers, directors, legal counsel and
advisors of the Shareholder, the Purchaser or the Company) not a party to this
Agreement, without prior written consent of the Purchaser, except for filings
required pursuant to the Exchange Act, and the rules and regulations thereunder,
or disclosures which the Shareholder's legal counsel advises in writing are
necessary in order to fulfill the Shareholder's obligations imposed by law, in
which event the Shareholder shall give prompt prior notice of such disclosure to
the Purchaser.
-3-
<PAGE>
7. Certain Covenants of the Shareholder.
------------------------------------
7.1. Except in accordance with the provisions of this Agreement, the
Shareholder agrees, prior to the termination of this Agreement as provided in
Section 4 above, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares; or
(b) grant any proxies, deposit any Shares into a voting trust or
enter into a voting agreement with respect to any Shares; or
(c) take any action to encourage, initiate or solicit any inquiries
or the making of any Acquisition Proposal (as defined in the Merger Agreement),
engage in any negotiations concerning or provide any confidential information or
data to, or have any discussions with, any person or entity relating to an
Acquisition Proposal, or otherwise assist or facilitate any effort or attempt by
any person or entity (other than the Company, or their officers, directors,
representatives, agents, affiliates or associates) to make or implement an
Acquisition Proposal. The Shareholders will immediately cease and cause to be
terminated any existing activities, discussions or negotiations on its part with
any parties conducted heretofore with respect to any of the foregoing, and will
notify the Company promptly if they become aware of any such inquiries or that
any proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be instituted or continued with,
the Company (or its officers, directors, representatives, agents, affiliates or
associates), such notice to include the material terms communicated.
7.2. The Shareholder agrees, while this Agreement is in effect, to notify
the Purchaser promptly of the number of any shares of Common Stock acquired by
the Shareholder after the date hereof.
8. Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by the Shareholder or the Purchaser in
this Agreement shall survive regardless of any investigation at any time made
by or on behalf of any party.
-4-
<PAGE>
9. Notices. All notices or other communications required or permitted
-------
hereunder shall be in writing (except as otherwise provided herein), given in
the manner provided in the Merger Agreement, and shall be deemed duly given when
received, addressed as follows:
If to the Purchaser:
Primus Telecommunications Group, Inc.
2070 Chain Bridge Road
Vienna, VA 22102
Attention: K. Paul Singh, Chairman and CEO
Facsimile: (703) 902-2814
With a copy to:
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103-2799
Attention: James D. Epstein, Esquire
Facsimile: (215) 981-4750
If to the Shareholder:
c/o TresCom International, Inc.
200 East Broward Blvd.
Ft. Lauderdale, FL 33301
Facsimile: (954) 463-4353
With a copy to:
Kelley Drye & Warren LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901-3229
Fax: (203) 351-8115
Attention: John T. Capetta, Esq.; or
10. Entire Agreement; Amendment. This Agreement, together with the documents
---------------------------
expressly referred to herein, constitute the entire agreement among the parties
hereto with respect to the subject matter contained herein and supersede all
prior agreements and understandings among the parties with respect to such
subject matter. This Agreement may not be modified, amended,
-5-
<PAGE>
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought to
be enforced.
11. Assigns. This Agreement shall be binding upon and inure to the benefit of
-------
the parties hereto and their respective successors, assigns and personal
representatives, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
12. Governing Law. Except as expressly set forth below, this Agreement shall
-------------
be governed by and construed in accordance with the laws of the State of
Florida, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. In addition, each of the Shareholders
and the Purchaser hereby agree that any dispute arising out of this Agreement or
the Merger shall be heard in the primary trial court of the State of Florida or
in the United States District Court for the Southern District of Florida and, in
connection therewith, each party to this Agreement hereby consents to the
jurisdiction of such courts and agrees that any service of process in connection
with any dispute arising out of this Agreement or the Merger may be given to any
other party hereto by certified mail, return receipt requested, at the
respective addresses set forth in Section 9 above.
13. Injunctive Relief. The parties agree that in the event of a breach of any
-----------------
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of any
provision of this Agreement, the aggrieved party shall be entitled to obtain in
any court of competent jurisdiction a decree of specific performance or to
enjoin the continuing breach of such provision, in each case without the
requirement that a bond be posted, as well as to obtain damages for breach of
this Agreement. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
14. Counterparts; Facsimile Signatures. This Agreement may be executed,
----------------------------------
including execution by facsimile, in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same document.
15. Severability. Any term or provision of this Agreement which is invalid or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision shall be interpreted to be only
so broad as is enforceable.
16. Further Assurances. Each party hereto shall execute and deliver such
------------------
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
-6-
<PAGE>
17. Third Party Beneficiaries. Nothing in this Agreement, expressed or
-------------------------
implied, shall be construed to give any person other than the parties hereto any
legal or equitable right, remedy or claim under or by reason of this Agreement
or any provision contained herein.
18. Legal Expenses. In the event any legal proceeding is commenced by any
--------------
party to this Agreement to enforce or recover damages for any breach of the
provisions hereof, the prevailing party in such legal proceeding shall be
entitled to recover in such legal proceeding from the losing party such
prevailing party's costs and expenses incurred in connection with such legal
proceedings, including reasonable attorneys fees.
19. Amendment and Modification. This Agreement may be amended, modified and
--------------------------
supplemented by a written document executed by the Purchaser and the
Shareholder.
[Remainder of Page Intentionally Left Blank]
-7-
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be
executed by its duly authorized officers, and the Shareholders have duly
executed this Agreement, each as of the date and year first above written.
PURCHASER:
PRIMUS TELECOMMUNICATIONS GROUP, INC.
By: /s/ K. Paul Singh
-------------------------------------------
K. Paul Singh, Chief Executive Officer
SHAREHOLDER:
______________________________________
Rudy McGlashan
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this Agreement to be
executed by its duly authorized officers, and the Shareholders have duly
executed this Agreement, each as of the date and year first above written.
PURCHASER:
PRIMUS TELECOMMUNICATIONS GROUP, INC.
By:___________________________________________
K. Paul Singh, Chief Executive Officer
SHAREHOLDER:
/s/ Rudy McGlashan
----------------------------------------------
Rudy McGlashan
