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RSL COMMUNICATIONS PLC.,
as Borrower
$100,000,000
SENIOR STANDBY LOAN AND WARRANT AGREEMENT
GUARANTEED BY RSL COMMUNICATIONS, LTD.
and RSL COM U.S.A., INC.
dated as of July 6, 2000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as Lender
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Table of Contents
Page
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SECTION 1. AMOUNT AND TERMS OF LOANS..................................1
1.1 Credit.....................................................1
1.2 Procedure for Borrowing....................................1
1.3 The Note...................................................2
1.4 Repayment..................................................2
1.5 Optional Prepayment and Reborrowing........................2
1.6 Mandatory Prepayments......................................2
1.7 Ranking....................................................3
1.8 Interest...................................................3
1.9 Computation of Interest and Fees...........................3
1.10 Fees.......................................................4
1.11 General Provisions as to Payments..........................4
1.12 Taxes......................................................4
SECTION 2. WARRANTS...................................................5
2.1 Warrant Issuance...........................................5
2.2 Warrant Registration.......................................5
2.3 Tax Matters................................................5
SECTION 3. CONDITIONS.................................................5
3.1 Effectiveness..............................................5
3.2 Drawdown Conditions........................................6
SECTION 4. REPRESENTATIONS AND WARRANTIES.............................7
4.1 Representations of the Borrower, RSL COM and RSL USA.......7
4.2 Representations of the Lender..............................9
SECTION 5. COVENANTS.................................................10
5.1 Information...............................................10
5.2 Notices...................................................11
5.3 Insurance.................................................11
5.4 Maintenance and Existence.................................11
5.5 Compliance with Law.......................................11
5.6 Consolidation, Merger, Sale of Assets, Etc................11
5.7 Use of Proceeds...........................................11
5.8 Pari Passu................................................11
5.9 Limitation on Certain Payments............................11
5.10 Limitation on Liens.......................................12
5.11 Compensation..............................................12
SECTION 6. EVENTS OF DEFAULT.........................................12
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Table of Contents
(continued)
Page
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SECTION 7. EXCHANGE NOTES............................................14
7.1 Conversion of Loans to Exchange Notes.....................14
7.2 Issuance of Exchange Notes; Terms.........................14
7.3 Exchange Note Closing.....................................15
SECTION 8. GUARANTEE.................................................16
SECTION 9. INDEMNIFICATION...........................................17
SECTION 10. DEFINITIONS...............................................19
SECTION 11. MISCELLANEOUS.............................................23
11.1 Amendments and Waivers....................................23
11.2 Successors and Assigns....................................23
11.3 Notices...................................................23
11.4 Expenses..................................................25
11.5 No Waiver; Cumulative Remedies............................25
11.6 Survival of Representations and Warranties................25
11.7 Severability..............................................25
11.8 Integration...............................................25
11.9 Counterparts..............................................25
11.10 Governing Law.............................................25
11.11 Submission to Jurisdiction................................26
11.12 Trial Without Jury........................................26
11.13 No Counterclaims..........................................26
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EXHIBIT 10.2 EXECUTION COPY
SENIOR STANDBY LOAN AND WARRANT AGREEMENT
SENIOR STANDBY LOAN AND WARRANT AGREEMENT, dated as of July 6, 2000,
by and among, RSL Communications PLC, a company organized under the laws of the
United Kingdom (the "Borrower"); RSL Communications, Ltd., a company organized
under the laws of Bermuda ("RSL COM") and RSL COM U.S.A., Inc., a Delaware
company ("RSL USA"), as guarantors (collectively, the "Guarantors"); and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, (the "Lender").
RECITALS:
A. The Lender is the Chairman of RSL COM.
B. The Borrower and RSL COM have requested the Lender to extend senior
financing to the Borrower; and the Lender is willing to provide such financing
on the terms and subject to the conditions hereof.
C. The Borrower is a wholly-owned Subsidiary of RSL COM and RSL USA is a
wholly-owned Subsidiary of the Borrower, each of which is willing to fully and
unconditionally guarantee the obligations of the Borrower hereunder.
The parties, intending to be legally bound, agree as follows:
SECTION 1.
AMOUNT AND TERMS OF LOANS
1.1 Credit. Subject to the terms and conditions of this Agreement, at any
time and from time to time during the period commencing on the date of this
Agreement to and including the Availability Date, the Lender agrees to make
revolving loans (individually, a "Loan" and collectively, the "Loans") to the
Borrower in an aggregate amount at anytime outstanding up to but not exceeding
the amount of the Commitment. All Loans shall become due and payable on June 30,
2001 (the "Maturity Date"), or such earlier date as provided herein.
1.2 Procedure for Borrowing.
(a) The Borrower shall give the Lender an irrevocable notice (which
notice must be received by the Lender prior to 11:00 a.m., New York City time,
at least five (5) Business Days in advance of the date of the borrowing for
Loans drawn in the principal amount of $5 million or less and at least ten (10)
Business Days in advance of the date of the borrowing for Loans drawn in the
principal amount exceeding $5 million) specifying the date of the borrowing
(which shall be a Business Day), the aggregate amount of such borrowing, and the
account to which funds should be transferred (the "Notice of Borrowing").
(b) Unless the Lender shall have determined that any applicable
condition specified in Section 3 has not been satisfied, not later than 1:00
p.m., New York City time, on the date of each borrowing, the Lender shall make
available such borrowing, in Federal or other funds immediately available in New
York City, to the Borrower by wire transfer to the account designated by the
Borrower in the Notice of Borrowing.
1.3 The Note. The obligation of the Borrower to repay the Lender shall be
evidenced by a single revolving demand note of the Borrower payable to the order
of the Lender on the Maturity Date, dated as of the date hereof and delivered
simultaneously herewith (the "Note"). The Note shall be in an amount equal to
the Commitment. The Loans evidenced by the Note shall bear interest as provided
in Section 1.8 hereof. The Note shall be valid and enforceable as to the
principal amount at any time only to the extent of the Loans advanced by the
Lender and then outstanding, and, as to the interest, only to the extent of the
interest accrued and unpaid in respect of such Loans.
1.4 Repayment. The Borrower hereby unconditionally promises to pay on the
Maturity Date, without notice, the principal amount of each Loan in accordance
with the terms hereof and of the Note. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 1.8 hereof.
1.5 Optional Prepayment and Reborrowing.
(a) The Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty. The Borrower shall give
notice to the Lender prior to 11:00 a.m., New York City time, two (2) Business
Days prior to any prepayment, specifying the date and amount of such prepayment.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with accrued interest to
such date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Accrued interest on the amount of principal of Loans prepaid under this Section
1.5 shall be due and paid on the date of such prepayment.
(b) Subject to Section 1.1, Section 1.6, Section 3.2 and Section 6
hereof, principal amounts prepaid on account of the Loans may be reborrowed.
1.6 Mandatory Prepayments.
(a) In the event of (i) any Change of Control of RSL COM, or (ii)
the Telegate Sale, then all outstanding Loans, together with all accrued and
unpaid interest thereon and all fees (if any), will become immediately due and
payable, and the Commitment will automatically and permanently be reduced to
zero.
(b) In the event that, (i) the Borrower or RSL COM issue any equity
or debt securities (other than upon the exercise of employee stock options), or
(ii) any Subsidiary of RSL COM issues any debt securities that are guaranteed by
RSL COM, or
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(iii) the Borrower, RSL COM or any Subsidiary of RSL COM sells any assets,
including but not limited to any securities of any other Person, outside the
ordinary course of business (each such event, a "Liquidity Event"), then the
Commitment will automatically and permanently be reduced by the amount of the
net cash proceeds received from such Liquidity Event. To the extent that the
aggregate amount of all outstanding Loans exceed the amount of the Commitment in
affect immediately after such reduction, all such Loans (to the extent of such
excess), together with all accrued and unpaid interest thereon and all fees (if
any) then due to the Lender, will be immediately due and payable.
(c) The Borrower shall give the Lender at least two (2) Business
Days' prior notice of any prepayment pursuant to this Section 1.6 setting forth
the date and amount of such prepayment, provided that the failure of the
Borrower to give such prior notice will not relieve the Borrower of any of its
obligations under this Section 1.6.
1.7 Ranking. The Loans and the Note shall in all respects rank pari passu
with all other senior indebtedness of the Borrower, RSL COM and RSL USA,
including, but not limited to, the obligations of the Borrower, RSL COM and RSL
USA with respect to the Borrower's High Yield Notes. The Loans and the Note
shall rank senior to all subordinated indebtedness of the Borrower, RSL COM and
RSL USA.
1.8 Interest.
(a) Each Loan shall bear interest for the period from and including
the date such Loan is made to but excluding the Maturity Date thereof on the
unpaid principal amount thereof at a rate per annum for each Interest Period
equal to the sum of LIBOR for such Interest Period plus a margin of 4.5%.
Notwithstanding the foregoing, the interest rate borne by the Loans shall not
exceed any amount in excess of the maximum rate of interest permitted to be
charged by applicable law.
(b) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise, but taking into account any applicable grace period
under Section 6(a)), such overdue amount shall bear interest at a rate per annum
which is (x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to Section 1.8(a) plus two percent (2.0%) and (y) in
the case of overdue interest, commitment fees or other amounts due and payable
hereunder, the interest rate then in effect for the Loans (but without giving
effect to the foregoing clause (x)) plus two percent (2.0%), in each case from
the date of such non-payment until such amount is paid in full (after as well as
before judgment).
(c) Interest shall be payable monthly in arrears on the last day of
each Interest Period, provided that interest accruing pursuant to Section 1.8(b)
shall be payable from time to time on demand.
1.9 Computation of Interest and Fees. Interest shall be calculated on the
basis of a 360-day year for the actual days elapsed. LIBOR for any Interest
Period shall be determined by the Lender and notified to the Borrower. Each
determination of an interest
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rate by the Lender pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower in the absence of manifest error.
1.10 Fees. The Borrower shall pay fees to the Lender as follows:
(a) a non-refundable arrangement fee in the amount equal to 1.00% of
the Commitment, payable in cash on the date of execution of this
Agreement;
(b) a draw down fee in an aggregate amount equal to 1.00% of the
principal amount of each Loan, payable in cash on the date of each drawing
of a Loan; and
(c) a commitment fee at a rate per annum equal to 1.00% of the daily
average of the Lender's undisbursed Commitment, for the period from and
including the date hereof to but excluding the Availability Date, payable
in cash in arrears on the first day of each month and, with respect to the
final payment, on the earlier of (i) the date on which the Commitment has
been permanently reduced to zero and (ii) the Availability Date.
1.11 General Provisions as to Payments. The Borrower shall make each
payment of principal of, and interest on, the Loans and of all fees hereunder
not later than 2:00 p.m., New York City time, on the due date thereof, in
Federal or other funds immediately available in New York City, to the Lender in
the amount due thereto at its address referred to in Section 11.3. Whenever any
payment of principal of, or interest on, the Loans or of fees shall be due on a
day which is not a Business Day, the date for payment thereof shall be extended
to the next succeeding Business Day (unless such an extension would have
resulted in a payment falling in another calendar month, in which case the
payment shall be made on the next preceding Business Day). If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
1.12 Taxes. Except as provided below in this Section 1.12, all payments
made by the Borrower, RSL COM or RSL USA, as the case may be, under this
Agreement, the Note or any other Loan Document shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
taxes, levies, imposts, duties, charges, deductions, withholdings or fees of any
nature whatsoever, together with any related penalties, interest thereon or
additions thereto, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes of the Lender
imposed by: (i) the jurisdiction under the laws of which the Lender is
organized; or (ii) the jurisdiction in which the Lender has a permanent
establishment to which the Note is attributable. If any such non-excluded taxes,
levies, imposts, duties, charges, deductions, withholdings or fees
("Non-Excluded Taxes") are required to be withheld or deducted from any amounts
payable to the Lender hereunder, under the Note or under any other Loan
Documents, the amounts so payable to the Lender shall be increased to the extent
necessary to yield to the Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder, under the Note or under
any other Loan Document at the rates or in the amounts specified in this
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Agreement, the Note and any other Loan Document. Whenever any Non-Excluded Taxes
are payable by the Borrower, RSL COM or RSL USA, as promptly as possible
thereafter the Borrower, RSL COM or RSL USA, as the case may be, shall send to
the Lender for its own account, a certified copy of an original official receipt
received by the Borrower, RSL COM or RSL USA, as the case may be, showing
payment thereof. If the Borrower, RSL COM or RSL USA, as the case may be, fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other required documentary
evidence, the Borrower, RSL COM or RSL USA, as the case may be, shall indemnify
the Lender for any incremental taxes, interest, penalties or additions to taxes
that may become payable by the Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
SECTION 2.
WARRANTS
2.1 Warrant Issuance. In order to induce the Lender to make available the
Loans hereunder, RSL COM agrees to issue to the Lender on the date of each
drawdown, if any, warrants (each, a "Warrant") to purchase an aggregate of
75,000 of RSL COM's Class A common shares for each $5 million in Loans drawn, up
to a maximum aggregate limit of 1,500,000 of RSL COM's Class A common shares.
RSL COM will issue warrants to purchase its Class A common shares on a pro rata
basis for Loans drawn in other than $5 million increments. Subject to the terms
and conditions of this Section 2.1, the Warrants will be exercisable in
accordance with and otherwise have the terms and conditions set forth in the
Form of Warrant attached to this Loan Agreement as Exhibit A.
2.2 Warrant Registration. The Warrants and the Class A common shares
issued upon exercise thereof will be entitled to the registration rights set
forth in the Warrant Registration Rights Agreement, dated as of October 3, 1996,
between the Borrower and The Chase Manhattan Bank.
2.3 Tax Matters. In connection with any Loan with respect to which RSL COM
issues Warrants to the Lender, the Lender and the Borrower shall agree to a
valuation of the Warrants so issued, and the Lender and Borrower shall use such
valuation for all tax purposes, including the determination of the issue price
of such Loan in accordance with U. S. Treasury Reg.ss.1.1273-2(h). For U. S. tax
purposes, each Loan with respect to which Warrants are issued to the Lender
shall be treated as a separate debt instrument with its own issue price and
issue date.
SECTION 3.
CONDITIONS
3.1 Effectiveness. This Agreement shall become effective on the date that
each of the following conditions shall have been satisfied (or waived in
accordance with Section 11.1):
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(a) receipt by the Lender of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Lender in form
satisfactory to it of telegraphic, telex or other written confirmation
from such party of execution of a counterpart hereof by such party);
(b) receipt by the Lender of the duly executed Note evidencing the
Borrowers' obligation to the Lender; and
(c) receipt by the Lender of all documents it may reasonably request
relating to the corporate authority for and the validity of this Agreement
and the Note, and any other matters relevant hereto, all in form and
substance satisfactory to the Lender.
The Lender shall promptly notify the Borrower of the effective date of this
Agreement, and such notice shall be conclusive and binding on all parties
hereto.
3.2 Drawdown Conditions. The obligation of the Lender to make any Loan is
subject to the satisfaction of the following conditions:
(a) the Lender shall have received of a Notice of Borrowing as
required by Section 1.2;
(b) the Lender and the Borrower shall have agreed to the Warrant
valuation described in Section 2.3;
(c) immediately after the Loan is extended, the aggregate
outstanding principal amount of the Loans will not exceed the Commitment;
(d) the Borrower has available the capacity or an applicable
exemption under the High Yield Notes and their respective indentures to
drawdown the Loan;
(e) immediately before and after the Loan is extended, no Event of
Default shall have occurred and be continuing;
(f) the representations and warranties of the Borrower, of RSL COM
and of RSL USA contained in this Agreement shall be true and correct in
all material respects on and as of the date of the Loan;
(g) since March 31, 2000, no Material Adverse Change shall have
occurred;
(h) RSL COM, RSL USA, the Borrower and the Lender shall have
received all consents and approvals, and shall have made all filings and
notices, required in connection with the transactions contemplated hereby;
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(i) no order of any court or governmental agency enjoining any of
the transactions contemplated hereby may be in effect, and no action,
suit, proceeding or investigation seeking any such order or substantial
damages in connection with the transactions contemplated hereby, or that
could reasonably be expected to have a Material Adverse Effect, may be
pending or threatened;
(j) RSL COM shall have delivered a duly executed Warrant to the
Lender permitting the Lender to purchase Class A Common Shares in
accordance with this Loan Agreement;
(k) the Borrower shall have paid all fees and expenses due to the
Lenders pursuant to the Loan Documents; and
(l) the Lender shall have received a certificate signed by the chief
executive officer of the Borrower, dated the date of any drawing of any
Loan, to the effect set forth in clauses (c), (d), (e) and (f) of this
Section 3.2 (and, with respect to (c), such certificate shall set forth
the calculation or exception upon which the Borrower is relying to
draw-down the Loan).
SECTION 4.
REPRESENTATIONS AND WARRANTIES
4.1 Representations of the Borrower, RSL COM and RSL USA. The Borrower,
RSL COM and RSL USA, jointly and severally, each represent and warrant to the
Lender, on the date hereof and on the date of any drawing of any Loan, as
follows:
4.1.1 Corporate Existence and Power. Each of the Borrower, RSL COM
and RSL USA is a company duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization, and has all
corporate powers and authority and all material governmental licenses,
authorizations, consents, and approvals required to own, lease and operate its
properties and to carry on its business as now conducted.
4.1.2 Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by each of the Borrower, RSL COM and RSL
USA of this Agreement, and the execution and delivery by the Borrower of the
Note, are within respective corporate powers of the Borrower, RSL COM and RSL
USA, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower, RSL COM or RSL USA or of any agreement, judgment, writ,
injunction, order, decree or other instrument binding upon the Borrower, RSL COM
or RSL USA or result in the creation or imposition of any lien, mortgage,
pledge, charge, security interest or encumbrance of any kind (the "Lien") on any
asset of the Borrower, RSL COM or RSL USA or any of their respective
Subsidiaries.
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4.1.3 Binding Effect. This Agreement has been duly and validly
executed and delivered by each of the Borrower, RSL COM and RSL USA, and
assuming the due authorization, execution and delivery by the other parties
hereto, constitutes the valid and binding obligation of the Borrower, RSL COM
and RSL USA enforceable against each of them in accordance with its terms; and,
when executed and delivered, the Note will constitute a valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, in each case except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights generally and by general
principles of equity.
4.1.4 SEC Reports and Financial Statements.
(a) RSL COM has filed all required forms, reports and documents with
the Securities Exchange Commission (hereinafter collectively referred to as the
"Company Reports") required to be filed by it pursuant to the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act") and the Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"), all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act.
(b) None of the Company Reports, including, without limitation, any
financial statements or schedules included therein, at the time filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(c) The consolidated balance sheets and the related consolidated
statements of income, cash flow and shareholders' equity (including without
limitation the related notes thereto) of RSL COM and its consolidated
Subsidiaries included in the financial statements contained in RSL COM's Annual
Report on Form 10-K for the year ended December 31, 1999 (the "Company 10-K")
and in RSL COM's Quarterly Reports on Form 10-Q for the quarter ended March 31,
2000 (the "Company 10-Q"), present fairly the consolidated financial position of
RSL COM and its consolidated Subsidiaries as of their respective dates, and the
results of consolidated operations and cash flows for the periods then ended,
all in conformity with United States generally accepted accounting principles
applied on a consistent basis, except as otherwise noted therein and in the case
of unaudited financial statements subject to normal year-end audit adjustments,
and except for certain footnote disclosures required by United States generally
accepted accounting principles.
4.1.5 Absence of Undisclosed Liabilities. Except for liabilities
reflected or reserved against in the consolidated balance sheet of RSL COM and
its Subsidiaries as of March 31, 2000 or reflected in the notes thereto, none of
RSL COM and its Subsidiaries has any liabilities or obligations (absolute or
accrued or contingent, whether accrued or unaccrued and whether due or to become
due) other than liabilities and obligations incurred in the ordinary course of
business since March 31, 2000 or liabilities
8
or obligations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
4.1.6 Changes. Since the date of the Company 10-K, and except as set
forth in the Company 10-K, the Company 10-Q or any Company Current Report filed
prior to the date hereof:
(a) no Material Adverse Change has occurred; and
(b) there has been no direct or indirect redemption, purchase or
other acquisition of any shares of RSL COM's capital stock, or any declaration,
setting aside or payment of any dividend or other distribution by RSL COM in
respect of RSL COM's capital stock.
4.1.7 Litigation. Since the date of the Company 10-K, and except as
set forth in the Company 10-K, the Company 10-Q or any Company Current Report
filed prior to the date hereof, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower or RSL COM threatened against or
affecting, the Borrower, RSL COM, RSL USA or any of their Subsidiaries before
any court or arbitrator or any governmental body, agency or official which could
reasonably be expected to have a Material Adverse Effect or which in any manner
draws into question the validity or enforceability of this Loan Agreement or the
Note.
4.1.8 Taxes. Each of RSL COM, RSL USA, the Borrower and their
Subsidiaries has filed or caused to be filed all income tax returns and all
other material tax returns which are required to be filed and has paid (i) all
taxes shown to be due and payable on such returns and (ii) all taxes shown to be
due and payable on any assessments of which it has received notice made against
it or any of its property and all other taxes, fees or other governmental
charges imposed on it or any of its property and no tax Lien has been filed, and
no claim is being asserted, with respect to any such tax, fee or other charge
(other than any (x) taxes, fees or other charges with respect to which the
failure to pay, in the aggregate, would not have a Material Adverse Effect or
(y) taxes, fees or other charges the amount or validity of which are currently
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves in accordance with United Stated
generally accepted accounting principles have been maintained).
4.2 Representations of the Lender. The Lender, represents and warrants to
the Borrower, RSL COM and RSL USA, on the date hereof, as follows:
4.2.1 Organization and Authorization. The Lender is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; and the execution, delivery and performance by the Lender of this
Agreement are within the Lender's limited liability company powers and have been
duly authorized by all necessary limited liability company action.
4.2.2 Binding Effect. This Agreement has been duly and validly
executed and delivered by the Lender and, assuming the due authorization,
execution and
9
delivery by the other parties hereto, constitutes the valid and binding
obligation of the Lender enforceable against the Lender in accordance with its
terms, in each case except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally and by general principles of equity.
SECTION 5.
COVENANTS
Until the later of (i) the Availability Date and (ii) the payment in
full of the Loans and all other liabilities of the Borrower, RSL COM and RSL USA
to the Lender under any of the Loan Documents whether now or hereafter existing:
5.1 Information. RSL COM will deliver to the Lender:
(a) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of RSL COM, a consolidated balance sheet
of RSL COM and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations and cash flows for such
fiscal year, accompanied by an opinion of Deloitte & Touche LLP or other
independent public accountants of nationally recognized standing that such
statements are in accordance with generally accepted accounting principles
in the United States, consistently applied;
(b) as soon as available and in any event within forty-five (45)
days after the end of each of the first three quarters of each fiscal year
of RSL COM, a consolidated balance sheet of RSL COM and its Subsidiaries
as of the end of such quarter and the related consolidated statements of
operations and cash flows for such quarter and for the portion of RSL
COM's fiscal year ended at the end of such quarter, certified (subject to
normal year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief financial
officer or the chief accounting officer or the treasurer of the Borrower;
(c) promptly upon the mailing thereof to the shareholders of RSL COM
generally, copies of all financial statements, reports, proxy statements
or other information so mailed;
(d) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
and 8-K (or their equivalents) which the Borrower or RSL COM shall have
filed with the Securities and Exchange Commission; and
(e) from time to time such additional historical information
regarding the financial position or business of RSL COM and its
Subsidiaries as the Lender may reasonably request.
10
5.2 Notices. Within three (3) days after any officer of the Borrower, RSL
COM or RSL USA obtains knowledge of any Event of Default or of any event or
condition which with the giving of notice and lapse of time would, unless cured
or waived, become an Event of Default, if such event or condition is then
continuing, the Borrower will deliver to each Lender a certificate of the chief
financial officer or the chief accounting officer or the treasurer of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto.
5.3 Insurance. RSL COM, RSL USA and the Borrower will maintain insurance
(including but not limited to liability insurance) with responsible and
reputable insurers in such amounts and covering such risks as is usually carried
by companies engaged in similar business and owning similar properties and such
other insurance as is required by law.
5.4 Maintenance and Existence. RSL COM, RSL USA and the Borrower will
preserve, renew and keep in full force and effect their corporate existence and
their rights, privileges and franchises necessary or desirable in the normal
conduct of business.
5.5 Compliance with Law. RSL COM, RSL USA and the Borrower will comply, in
all material respects, with all applicable laws, rules, regulations and orders
which are of material importance to the conduct of the business, or the
ownership of their property (including, without limitation, paying before the
same become delinquent, all taxes, assessments and governmental charges upon it
or its property), except where the necessity of compliance therewith is
contested in good faith.
5.6 Consolidation, Merger, Sale of Assets, Etc. RSL COM shall not
consolidate with or merge with or into any Person, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of its assets,
whether in one transaction or a group of related transactions, to any Person or
group of Persons (except for any such transaction constituting a Change of
Control, provided that RSL COM fully complies with its obligations under Section
1.6) unless prior to the closing thereof, all outstanding Loans (together with
all accrued and unpaid interest thereon and all fees, if any) have been paid and
thereupon the Commitment shall have been permanently reduced to zero.
5.7 Use of Proceeds. The Borrower shall use the proceeds of the Loans made
under this Agreement in compliance with all legal and regulatory requirements
for general corporate purposes. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
5.8 Pari Passu. The Borrower shall ensure that no claims of the Lender
will be at any time subordinate to the claims of other unsecured creditors
(except to the extent provided under bankruptcy, insolvency and other similar
laws of general application relating to or affecting the enforcement of
creditors' rights).
5.9 Limitation on Certain Payments. RSL COM shall not, and shall not
permit the Borrower or any other of its Subsidiaries, directly or indirectly, to
(i) declare
11
or pay any dividend or make any distribution on or in respect of its capital
stock (except dividends or distributions payable to RSL COM), or (ii) make any
payment on account of the purchase, redemption, defeasance retirement or
acquisition of (x) any shares of any capital stock of RSL COM or any of its
Subsidiaries, (y) any option, warrant or other right to acquire shares of any
capital stock of RSL COM or any of its Subsidiaries, or (z) any debt of RSL COM
or any of its Subsidiaries that is subordinated to the Loans, other than (A)
dividends or distributions made by RSL COM in kind on a cashless basis with
respect to RSL COM Series A preferred shares or other series of preferred shares
issued by RSL COM after the date hereof or (B) distributions of RSL COM Class A
shares or cash pursuant to roll-up or similar agreements between RSL COM, its
Subsidiaries and other shareholders of such Subsidiaries that do not
individually or in the aggregate exceed 5% of the value of the capital stock of
such Subsidiary.
5.10 Limitation on Liens. RSL COM shall not, and shall not permit the
Borrower or any other of its Subsidiaries, directly or indirectly, to create,
incur, assume or permit to exist any Lien on any asset now owned or hereafter
acquired, or any income or profits therefrom, or assign or convey any right to
receive income therefrom, except for any Permitted Lien, or any banker's right
of set-off arising by operation of law in the ordinary course of business,
unless contemporaneously therewith effective provision is made to secure the
Note or, in respect of Liens on RSL COM's property or assets, the guarantee set
forth in Section 6 hereof, equally and ratably with such obligation for so long
as such obligation is so secured.
5.11 Compensation. RSL COM will not, and will not permit any of its
Subsidiaries to, pay any bonus (whether in securities, cash or otherwise) to any
executive officer of RSL COM except in accordance with and within the limits
provided in the bonus programs of RSL COM and its Subsidiaries, or any contract
between RSL COM or any of its Subsidiaries and such officer, in effect on the
date hereof.
SECTION 6.
EVENTS OF DEFAULT
The Borrower shall be in default under this Agreement upon the
happening of any of the following Events of Default:
(a) a default in the payment when due of any amount due with respect
to the Loans, or in the performance of any obligation, covenant or
liability contained herein or in any of the Notes, which default shall
continue unremedied for a period of five (5) days in a case of a payment
default, or thirty (30) days after notice thereof in the case of any other
default;
(b) any representation or warranty of the Borrower, RSL COM or RSL
USA set forth herein, or any representation, warranty, or written
statement made or furnished to the Lender by or on behalf of the Borrower,
RSL COM or RSL USA pursuant hereto, proves to have been false or
misleading in any material respect when made or furnished;
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(c) any change occurs in the condition, financial or otherwise, of
the Borrower, RSL COM, RSL USA or any Subsidiary of RSL COM that, in the
reasonable opinion of the Lender has or could have a Material Adverse
Effect;
(d) the Borrower, RSL COM or RSL USA admits in writing its inability
to pay its debts generally as such debts become due, or carry on as a
going business;
(e) a judgment or order for the payment of money in excess of an
amount of $5,000,000 is entered against the Borrower, RSL COM or RSL USA
and such judgment or order shall continue unsatisfied and unstayed for a
period of thirty (30) days;
(f) an event of default occurs under the indenture relating to any
of the High Yield Notes, or with respect to any other indebtedness of RSL
COM, the Borrower or any of their Subsidiaries arising under a single
instrument or document or under a series of related instruments or
documents in an aggregate amount exceeding $10,000,000; or
(g) (i) the Borrower, RSL COM or RSL USA or any of RSL COM's
Subsidiaries, shall commence any case, proceeding or other action (x)
under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it,
or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (y) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower, RSL USA, or any of RSL COM or its Subsidiaries,
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower, RSL USA, or any of RSL COM
or its Subsidiaries, any case, proceeding or other action of a nature
referred to in clause (i) above which (x) results in the entry of an order
for relief or any such adjudication or appointment or (y) remains
undismissed, undischarged or unbonded for a period of ninety (90) days; or
(iii) there shall be commenced against the Borrower, RSL USA, or any of
RSL COM or its Subsidiaries, any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 90 days
from the entry thereof; or (iv) the Borrower, RSL USA, or any of RSL COM
or its Subsidiaries, shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above.
Upon the occurrence of an Event of Default specified in clause (i) or (ii) of
paragraph (g) of this Section with respect to the Borrower, RSL COM or RSL USA,
the Loans (with accrued interest thereon) and all other amounts owing under this
Agreement shall
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immediately become due and payable and the Commitment shall be permanently
reduced to zero. Upon the occurrence of any other Event of Default, the Lender
may, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
and/or permanently reduce the Commitment to zero. Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
SECTION 7.
EXCHANGE NOTES
7.1 Conversion of Loans to Exchange Notes. Upon the occurrence of any
Event of Default and the expiration of any applicable cure period, in addition
to any other remedies available to the Lender, or immediately after the Maturity
Date or at anytime thereafter that the Loans remain unpaid, the Lender may, at
its sole option, convert all or any portion of the outstanding principal amount
of the Loans, together with any accrued and unpaid interest and fees, into one
or more senior convertible notes of the Borrower having the terms set forth in
this Section 7 and the term sheet attached hereto as Exhibit B (the "Exchange
Notes"). The Exchange Notes will be unconditionally guaranteed as to payment of
principal, interest and any other amounts due thereon by RSL COM and RSL USA.
7.2 Issuance of Exchange Notes; Terms.
(a) The Exchange Notes will be issued under and subject to the terms
of an indenture to be concluded between the Borrower, RSL COM, RSL USA and an
indenture trustee reasonably satisfactory to the Lender (the "Exchange Note
Indenture"). The terms of the Exchange Note Indenture will be in form and
substance reasonably satisfactory to the Lender, but will not contain terms more
onerous to the Borrower than the terms of the Dollar Note Indenture, dated as of
February 22, 2000, among the Borrower, RSL COM, RSL USA and The Chase Manhattan
Bank, as trustee, with respect to the Borrower's 12-7/8% Senior Notes due 2010.
The Lender may exercise its option to convert all or any portion of the
outstanding principal amount of the Loans, together with any accrued and unpaid
interest and fees, into Exchange Notes by delivering notice of its exercise to
the Borrower (such notice, the "Exchange Notice") at any time after the Maturity
Date or at any time after the occurrence of an Event of Default. The Exchange
Notice will state the principal amount of the Exchange Notes to be issued by the
Borrower. After the Maturity Date or after the occurrence of an Event of
Default, within thirty days (30) days of receipt of the Exchange Notice and in
accordance with the terms hereof, the Borrow will execute the Exchange Note
Indenture and other ancillary documents required thereby and by Section 7.3 and
issue to the Lender the Exchange Notes in an aggregate principal amount set
forth in the Exchange Notice and the amount of Loans and accrued but unpaid
interest and fees then outstanding will be reduced by the principal amount of
the Exchange Notes so issued. The date on which the Exchange Notes are issued is
referred to herein as the "Exchange Note Closing Date."
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(b) The Exchange Notes will mature on the seventh anniversary of the
Exchange Note Closing Date.
(c) Interest will accrue on the Exchange Notes, commencing from the
Exchange Note Closing Date, and be payable in arrears on each March 31, June 30,
September 30 and December 31 thereafter until all amounts due and payable under
the Exchange Notes has been paid in full, at an annual rate that is equal to the
greater of (i) the applicable interest rate of the Loans at the time of the
exchange, plus ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇) the yield in effect two days prior to the
Exchange Note Closing Date with respect to U.S. Treasury Notes with a remaining
maturity closest to seven years, plus 600 basis points and (iii) the high yield
index maintained by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. for securities having a similar
credit rating in effect two days prior to the Exchange Note Closing Date, plus
200 basis points. Notwithstanding the foregoing, after the occurrence and during
the continuance of any default under the Exchange Notes or the Exchange Note
Indenture, interest will accrue on the Exchange Notes at the then applicable
interest rate, plus 200 basis points per annum.
(d) At any time and from time to time at the option of the holder
thereof upon at least five (5) Business Days' written notice to RSL COM, the
Exchange Notes will be convertible, pursuant to the terms and conditions hereof
and the Exchange Note Indenture, in whole or in part, into that number of Common
Shares equal to the quotient of (i) the principal amount of the Exchange Notes
then being converted, plus any accrued and unpaid interest thereon, divided by
(ii) the Exchange Note Conversion Price. The Exchange Note Conversion Price will
equal the lower of (i) $12 and (ii) the average daily closing bid price of the
Common Stock for the ten trading days immediately preceding the Exchange Note
Closing Date.
(e) Prior to the issuance of the Exchange Notes, the Borrower and
the Guarantors will enter into an exchange and registration rights agreement
(the "Exchange and Registration Rights Agreement") that will provide for the
registration under the Securities Act (or the exchange for identical notes
registered under the Securities Act) of the Exchange Notes in accordance with
the terms thereof. The Exchange and Registration Rights Agreement will be in
form and substance reasonably satisfactory to the Lender, but will not contain
terms more onerous for the Borrower than the exchange and registration rights
agreement, dated February 22, 2000, between the Borrower and ▇▇▇▇▇▇▇ Sachs, on
behalf of the Initial Purchasers defined therein with respect to the Borrower's
12-7/8% Senior Notes due 2010.
7.3 Exchange Note Closing. On or prior to the Exchange Note Closing Date,
the Borrower will deliver to the Lender: (i) an Exchange Note Indenture, duly
executed by the Borrower, the Guarantors and the trustee for the Exchange Notes,
which will be a nationally recognized trustee reasonably acceptable to the
Lender; (ii) one or more duly executed and authenticated global Exchange Notes
in the form provided by the Exchange Note Indenture; (iii) an Exchange and
Registration Rights Agreement, duly executed by the Borrower and the Guarantors;
and (iv) the legal opinion of Rosenman & Colin, dated the Exchange Note Closing
Date, as to (A) the due organization and good standing of the Borrower and the
Guarantors, (B) the due authorization, execution and delivery (and,
15
with respect to the Exchange Notes, authentication) of the Exchange Notes, the
Exchange Note Indenture and the Exchange and Registration Rights Agreement by
the Borrower and each of the Guarantors and that each of such instruments
constitutes the valid and legally binding obligation of the Borrower and the
Guarantors and is enforceable in accordance with its terms (subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights), (C) the due issuance
of the Exchange Notes and that such issuance does not conflict with or result in
a breach or violation of or constitute a default under any indenture of the
Borrower and the Guarantors, other material contract or law; and (D) such other
matters reasonably requested by the Lender.
SECTION 8.
GUARANTEE
Each of RSL COM and RSL USA jointly and severally, unconditionally
and irrevocably guarantees to the Lender:
(a) the due, prompt and complete payment by the Borrower of the
principal of and interest on the Loans advanced from time to time under
this Agreement and any other amount due hereunder and under the Note, when
and as the same shall become due and payable, whether at maturity or by
acceleration, in accordance with the terms of this Agreement and the Note,
and
(b) the due, prompt and complete payment of the principal of and
interest on the Exchange Notes issued from time to time under this
Agreement and any other amount due hereunder or under the Exchange Note
Indenture, and
(c) the due, prompt and faithful performance of, and compliance
with, all other undertakings of the Borrower contained in this Agreement
and the Note and in any other Loan Document (the amounts payable by the
Borrower under any of the Loan Documents, and all other obligations of the
Borrower thereunder, being sometimes collectively hereinafter referred to
as the "Guaranteed Obligations").
This guaranty is a guaranty of payment, performance and compliance
and not of collectibility and is in no way conditioned or contingent upon any
attempt to collect from or enforce performance or compliance by the Borrower or
upon any other event or condition whatsoever. If for any reason whatsoever the
Borrower shall fail or be unable duly, punctually and fully to pay such amounts
as and when the same shall become due and payable or to perform or comply with
any other Guaranteed Obligation, whether or not such failure or inability shall
constitute an Event of Default hereunder, RSL COM or RSL USA will forthwith pay
or cause to be paid such amounts to the Lender, at its address specified in
Section 11.3 hereof, in lawful money of the United States, or perform or comply
with such Guaranteed Obligations or cause such Guaranteed Obligations to be
performed or complied with together with interest (in the amounts and to the
extent required) on any amount due and owing from the Borrower. RSL COM and RSL
USA, jointly and severally, promptly after demand, will reimburse the Lender for
all
16
costs and expenses of collecting such amounts or otherwise enforcing this
guarantee, including, without limitation, the reasonable fees and expenses of
counsel. The obligations of RSL COM and RSL USA set forth herein constitute the
full recourse obligations of RSL COM and RSL USA enforceable against each of
them to the full extent of all assets and properties of each of them. The
obligations of RSL COM and RSL USA under this Section are primary, absolute and
unconditional, are not subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment or defense based upon
any claim RSL COM, RSL USA or any other Person may have against the Borrower,
the Lender or any other Person, and shall remain in full force and effect
without regard to, and shall not be released, discharged or in any way affected
by, any circumstance or condition whatsoever (whether or not RSL COM, RSL USA or
the Borrower shall have any knowledge or notice thereof). Each of RSL COM and
RSL USA unconditionally waives, to the extent permitted by applicable law, (i)
any notice that may be required, by statute, rule of law or otherwise, to
preserve any rights of the Lender against RSL COM or RSL USA, (ii) presentment
to or demand of payment from the Borrower, RSL COM or RSL USA with respect to
the Note, the Exchange Notes or protest for nonpayment or dishonor, (iii) any
right to the enforcement, assertion, exercise or exhaustion by the Lender of any
right, power, privilege or remedy conferred in this Agreement or any other Loan
Document or otherwise, (iv) any requirement of diligence on the part of the
Lender, (v) any requirement to mitigate the damages resulting from any default
under any Loan Document, (vi) any notice of any sale, transfer or other
disposition of any right, title to or interest in any Loan by the Lender, and
(vii) any other circumstance whatsoever which might otherwise constitute a legal
or equitable discharge, release or defense of RSL COM, or RSL USA or surety or
which might otherwise limit recourse against RSL COM or RSL USA.
SECTION 9.
INDEMNIFICATION
In the event that the Lender (the "Indemnified Party") becomes
involved in any capacity in any action, proceeding or investigation brought by
or against any Person, including, without limitation, RSL COM or any equity
holders or creditors of RSL COM and RSL USA, in connection with or as a result
of any matter referred to in this Agreement, including but not limited to the
Loans, RSL COM and RSL USA periodically will reimburse such Indemnified Party
for all of its out-of-pocket legal, expert and other expenses (including the
out-of-pocket cost of any investigation and preparation) incurred in connection
therewith. RSL COM and RSL USA also will indemnify and hold each Indemnified
Party harmless against any and all losses, claims, damages, expenses, actions,
demands, assessments, costs, judgments, awards, fines, sanctions, penalties,
amounts paid in settlement (provided that RSL COM has consented to such
settlement), or liabilities ("Damages") to any such Person in connection with or
as a result of any matter referred to in this Agreement and without regard to
the exclusive or contributory negligence of any of the Indemnified Parties,
except to the extent that any such Damages are finally judicially determined to
have resulted from the gross negligence, willful misconduct or bad faith of such
Indemnified Party in connection with the subject matter of this Agreement (and
in the event of such a determination, the
17
Indemnified Party will reimburse RSL COM and RSL USA for any expenses advanced
to such Indemnified Party by RSL COM and RSL USA pursuant to the immediately
preceding sentence). If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold it harmless, then
RSL COM and RSL USA shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages in such proportion as is
appropriate to reflect the relative economic interests of RSL COM and RSL USA
and RSL COM's equity holders, on the one hand, and such Indemnified Party, on
the other hand, in the matters contemplated in this Agreement as well as the
relative fault of RSL COM and RSL USA, on the one hand, and such Indemnified
Party, on the other hand, with respect to such loss, claim, damage or liability
and any other relevant equitable considerations. The reimbursement, indemnity
and contribution obligations of RSL COM and RSL USA under this Section will be
in addition to any liability which RSL COM and RSL USA may otherwise have, shall
extend upon the same terms and conditions to any Affiliate of any Indemnified
Party and the directors, agents, advisors, employees and controlling Persons of
such Indemnified Party and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of RSL COM and RSL USA, such Indemnified Party, any such
Affiliate and any such Person. RSL COM and RSL USA will not be responsible, in
connection with any one action or proceeding (or separate but substantially
similar proceedings arising out of the same general allegations), for the fees
and expenses of more than one firm of attorneys at any time for all Indemnified
Parties, except to the extent local counsel, in addition to its regular counsel,
is required to effectively defend against such action, provided that if counsel
to the Indemnified Parties reasonably determines that there is a conflict of
interest among the Indemnified Parties, then the Indemnified Party with respect
to which such conflict of interest relates may employ separate counsel at the
cost and expense of RSL COM and RSL USA. RSL COM and RSL USA also agree that
neither any Indemnified Party nor any of such Affiliates, directors, agents,
advisors, employees or controlling Persons will have any liability based on its
or their exclusive or contributory negligence or otherwise to RSL COM and RSL
USA, any Person asserting claims on behalf or in the right of RSL COM and RSL
USA, or any other Person in connection with or as a result of any matter
referred to in this Agreement except to the extent that any Damages incurred by
RSL COM and RSL USA result from the gross negligence, willful misconduct or bad
faith of such Indemnified Party in connection with the subject matter of this
Agreement. Prior to entering into any agreement or arrangement with respect to,
or effecting, any merger, statutory exchange or other business combination or
proposed sale, exchange, dividend or other distribution or liquidation of all or
a significant portion of its assets in one or a series of transactions or any
significant recapitalization, or reclassification of its outstanding securities,
RSL COM shall notify the Indemnified Parties in writing thereof (if not
previously so notified) and, if requested by the Indemnified Parties, shall
arrange in connection therewith alternative means of providing for the
obligations of RSL COM set forth in this Section including the assumption of
such obligations by another party, insurance, surety bonds or the creation of an
escrow, in each case in an amount and upon terms and conditions satisfactory to
the Indemnified Parties.
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SECTION 10.
DEFINITIONS
In this Agreement, the following terms shall have the following
respective meanings:
"Affiliate" means, with regard to any person, any other person who,
individually or as a part of a "group" for purposes of Section 13(d) of
the Securities Exchange Act, controls, is controlled by or is under common
control with, such person.
"Agreement" means this Senior Standby Loan and Warrant Agreement,
including any exhibits and schedules hereto, as it may be supplemented or
amended from time to time in accordance with its terms.
"Availability Date" means the earlier of (i) May 30, 2001 and (ii)
the date of Change of Control of the Company.
"Borrower" shall have the meaning assigned to it in the preamble.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
by law to close, which is also a day on which such banks are open for
international business (including dealings in dollar deposits) in London.
"Change of Control of the Company" means the occurrence of any of
the following events:
(a) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall
be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire within one year), directly or
indirectly, of more than twenty percent (20%) of the total voting
power of the equity securities of the Borrower or RSL COM; provided
that Permitted Holders beneficially own, directly or indirectly, in
the aggregate a lesser percentage of the total voting power of the
equity securities of RSL COM than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of Directors of
RSL COM; or
(b) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of
Directors of RSL COM (together with any new directors whose election
by such Board of Directors of RSL COM or whose nomination for
election by the shareholders of RSL COM was approved by a vote of a
majority of the directors of RSL COM then still in office who were
either directors at the
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beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of RSL COM then in
office.
"Commitment" means $100,000,000.
"Company 10-K" shall have the meaning assigned to it in Section
4.1.4(c).
"Company 10-Q" shall have the meaning assigned to it in Section
4.1.4(c).
"Company Current Report" means any report filed by RSL COM with the
Securities and Exchange Commission on Form 8-K.
"Company Reports" has the meaning assigned to it in Section 4.1.4.
"Damages" shall have the meaning assigned to it in Section 9.
"Events of Default" shall mean any of the events set forth in
Section 6.
"Exchange Act" shall have the meaning assigned to it in Section
4.1.4.
"Exchange and Registration Rights Agreement" has the meaning
assigned to it in Section 7.2(e).
"Exchange Note Closing Date" is defined in Section 7.2.
"Exchange Note Conversion Price" has the meaning assigned to it in
Section 7.2(d).
"Exchange Note Indenture" has the meaning assigned to it in Section
7.2(a).
"Exchange Notes" has the meaning assigned to it in Section 7.1.
"Exchange Notice" has the meaning assigned to it in Section 7.2(a).
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government including, without limitation, the European
Union.
"Guaranteed Obligations" shall have the meaning assigned to it in
Section 8.
"Guarantors" has the meaning assigned to it in the Preamble.
"High Yield Notes" means RSL COM's (i) 12 1/4% Senior Notes due
2006, (ii) 9 1/8% Senior Notes due 2008, (iii) 10 1/8% Senior Discount
Notes due 2008, (iv) 10% Senior Discount Notes due 2008, (v) 12% Senior
Notes due 2008,
20
(vi) 10 1/2% Senior Notes due 2008, (vii) the 9 7/8% Senior Notes due 2009
and (viii) the 12 7/8% Senior Dollar Notes and Senior Euro Notes due 2010.
"Indemnified Party" shall have the meaning assigned to it in Section
9.
"Interest Period" means, for each Loan, (a) the period commencing on
and including the date of such Loan and ending on but not including the
last day of the same month, and (b) thereafter each one-month period
commencing on and including the last day of the immediately preceding
Interest Period and ending on but excluding the last day of next
succeeding month, provided that (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
preceding Business Day and (ii) any Interest Period which would otherwise
end after the Maturity Date shall end on the Maturity Date.
"Lender" shall have the meaning assigned to it in the preamble.
"LIBOR" for any Interest Period means the one month London Interbank
Offered Rate for the first day of such Interest Period as set forth in the
"Money Rates" column of the Wall Street Journal, or as published on such
date (or, if not published on such date, the next day following such date
when so published) in such other publication as the Agent may designate.
"Lien" shall have the meaning assigned to it in Section 4.1.2.
"Liquidity Event" shall have the meaning assigned to it in Section
1.6.
"Loan Documents" means the Commitment Letter , this Agreement, the
Note, the Warrants, the Exchange Notes, the Exchange Note Indenture, the
Exchange and Registration Rights Agreement and any other agreements
entered into in connection with the transactions contemplated hereby.
"Loans" shall have the meaning assigned to it in Section 1.1.
"Material Adverse Change" means any material adverse change in the
financial condition, business, operations, assets (taken as a whole),
liabilities (taken as a whole) or prospects of the Borrower or of RSL COM
and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business, operations, assets (taken as a whole),
liabilities (taken as a whole) or prospects of the Borrower or RSL COM and
its Subsidiaries, taken as a whole, or on the ability of the Borrower or
RSL COM to perform its obligations hereunder.
"Maturity Date" shall have the meaning assigned to it in Section
1.1.
"Non-Excluded Taxes" shall have the meaning assigned to it in
Section 1.12.
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"Note" shall have the meaning assigned to it in Section 1.3.
"Notice of Borrowing" shall have the meaning assigned to it in
Section 1.2(a).
"Permitted Holders" means the Lender and its Affiliates.
"Permitted Liens" means (i) the respective rights and interests
created by or pursuant to or resulting from the Loan Documents, and the
respective rights of the Agent and Borrower as therein provided; (ii)
Liens for taxes either not yet due or being contested in good faith (and
for the payment of which adequate reserves have been provided) by
appropriate proceedings; (iii) materialmen's, mechanics', workers',
repairmen's, employees, or other like Liens arising in the ordinary course
of business for amounts the payment of which is either not yet delinquent
or is being contested in good faith (and for the payment of which adequate
reserves have been provided) by appropriate proceedings; (iv) Liens (other
than Liens for taxes) arising out of judgments or awards against the
Borrower with respect to which at the time an appeal or proceeding for
review is being prosecuted in good faith and with respect to which there
shall have been secured a stay of execution pending such appeal or
proceeding for review; and (v) Liens permitted to be incurred under each
of the Indentures in respect of the High Yield Notes outstanding on the
date hereof.
"Person" means, an individual, corporation, partnership,
association, trust or other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
"RSL COM" shall have the meaning assigned in the preamble.
"RSL USA" shall have the meaning assigned in the preamble.
"Securities Act" shall have the meaning assigned to it in Section
4.1.4.
"Subsidiary" means, as to any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total
voting power of shares of capital stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person or (ii) one or more Subsidiaries of such Person.
"Telegate Sale" means the consummation of the transactions
contemplated by the Option Agreement, dated May 6, 2000 (the "Option
Agreement"), between Seat Pagine Gialle S.P.A. and RSL COM Deutschland
GmbH, pursuant to which the Borrower or any of its Affiliates receives
consideration for the Remaining Shareholding (as defined in the Option
Agreement) either from Seat Pagine Gialle S.P.A. or from an intermediary
in connection with any hedging transaction with
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respect to amounts due the Borrower and its Affiliates under the Option
Agreement.
"Warrant" has the meaning set forth in Section 2.1.
"Warrant Registration Rights Agreement" has the meaning assigned to
it in Section 2.2.
SECTION 11.
MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor the Note, nor any
terms hereof or thereof, may be amended, supplemented or modified except in a
writing executed by the parties hereto in accordance with the provisions of this
subsection. In the case of any waiver, the Borrower and RSL COM and the Lender
shall be restored to their former positions and rights hereunder and under the
other Loan Documents, and any Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereon.
11.2 Successors and Assigns. This Agreement shall inure to the benefit of
the Lender and its heirs, personal representatives, successors and assigns and
shall be binding upon the Borrower, RSL COM, RSL USA and the respective
successors and assigns of each of them, except that none of the Borrower, RSL
COM or RSL USA may assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the Lender and, other
than to Affiliates, the Lender may not assign or otherwise transfer any of its
rights or obligations under this Agreement for so long as the Commitment has not
been permanently reduced to zero without the consent of the Borrower.
11.3 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be effective (i) if given by mail, 72
hours after such communication is deposited in the mail with first class postage
prepaid, or (ii) if given by any other means, when delivered at the address
specified below in this Section 11.3.
The Borrower: RSL Communications PLC
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
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Rosenman & Colin
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
RSL COM: RSL Communications, Ltd.
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Rosenman & Colin
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
RSL USA: RSL COM U.S.A., Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
with a copy to:
Rosenman & Colin
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
The Lender: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
telecopy number: ▇▇▇-▇▇▇-▇▇▇▇
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11.4 Expenses. The Borrower shall pay (i) the reasonable fees and expenses
of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the Lender, in connection with the
preparation of the Loan Documents or any amendment thereof or any Event of
Default or alleged Event of Default thereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Lender, including reasonable
fees and expenses of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify the Lender against any transfer taxes,
documentary taxes, stamp duties, assessments or charges made by any Governmental
Authority by reason of the execution, delivery, amendment or enforcement of any
of the Loan Documents.
11.5 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
11.6 Survival of Representations and Warranties. All representations and
warranties made hereunder and in the Note and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.
11.7 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without, to the extent
permitted by law, invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not, to the extent
permitted by law, invalidate or render unenforceable such provision in any other
jurisdiction.
11.8 Integration. This Agreement and the Note represent the entire
agreement of the Borrower, RSL COM, RSL USA, and the Lender with respect to the
subject matter hereof, and supersede any and all prior arrangements and
understandings, oral or written, relating to the subject matter hereof and the
Note.
11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original but all of which
together shall constitute one and the same instrument.
11.10 Governing Law. THIS AGREEMENT, THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL FOR ALL PURPOSES BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO
THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.
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11.11 Submission to Jurisdiction. EACH OF THE BORROWER, RSL COM, RSL USA
AND THE LENDER AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR PROCEEDING
ARISING UNDER, OUT OF OR WITH RESPECT TO THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT, IT SHALL SUBMIT TO THE JURISDICTION OF THE UNITED STATES COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT LOCATED IN THE CITY AND
COUNTY OF NEW YORK, AND AGREES TO VENUE IN ANY SUCH COURT.
11.12 Trial Without Jury. EACH OF THE BORROWER, RSL COM, RSL USA AND THE
LENDER AGREES THAT ANY LITIGATION GROWING OUT OF ANY CONTROVERSY WITH RESPECT
TO, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT WILL BE TRIED BY A JUDGE SITTING WITHOUT A JURY AND HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING.
11.13 No Counterclaims. THE BORROWER AND RSL COM AND RSL USA HEREBY WAIVE
THE RIGHT TO ASSERT COUNTERCLAIMS (OTHER THAN COUNTERCLAIMS RELATED TO THE
TRANSACTION CONTEMPLATED HEREIN) IN ANY LITIGATION IN ANY COURT WITH RESPECT TO,
IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY NOTE, OR ANY OTHER LOAN
DOCUMENT.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written:
RSL COMMUNICATIONS PLC
By: /s/
-----------------------------------------
Name:
Title:
RSL COM U.S.A., INC.
By: /s/
-----------------------------------------
Name:
Title:
RSL COMMUNICATIONS, LTD.
By: /s/
-----------------------------------------
Name:
Title:
/s/
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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