EXHIBIT 10.3
EXHIBIT A
FORM OF WARRANT
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS WARRANT NOR SUCH
SECURITIES NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED
OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933 AND THE
APPLICABLE RULES AND REGULATIONS THEREUNDER.
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RSL COMMUNICATIONS, LTD.
Warrant for the Purchase Class A Common Shares
________ Class A Common Shares
FOR VALUE RECEIVED, RSL COMMUNICATIONS, LTD. (the "Company"), a Bermuda
corporation, hereby certifies that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, or his registered assigns
(the "Holder") is entitled, subject to the provisions of this Warrant, to
purchase from the Company, at any time or from time to time during the Exercise
Period, as hereinafter defined, an aggregate of ________ fully paid and
nonassessable Class A Common Shares of the Company, par value $0.00457 per
share, at a purchase price per share equal to the Exercise Price as hereinafter
defined. The term "Common Stock" shall mean the aforementioned Class A Common
Shares, par value $0.00457 per share, of the Company, together with any other
equity securities that may be issued by the Company in substitution therefor.
The number of shares of Common Stock to be received upon the exercise of this
Warrant and the Exercise Price are subject to adjustment from time to time as
hereinafter set forth.
Section 1. Definitions. The following terms, as used herein, have the
following respective meanings:
"Act" means the Securities Act of 1933, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise period" means the period of time from the Issuance Date until
5:00 P.M., local time in New York City, on the date that is the seventh
anniversary of the Issuance Date.
"Exercise Price" shall be a price per share of Common Stock equal to
$11.50.
"Issuance Date" means ____________________.
"Unit Warrants" means the Warrants to purchase the Company's Class A
Common Stock initially attached to the Senior Notes due 2006 issued by RSL
Communications PLC, a United Kingdom corporation and wholly owned subsidiary of
the Company.
"Warrant Shares" means the shares of Common Stock deliverable upon
exercise of this Warrant, as adjusted from time to time, except as provided in
Section 10 hereof.
Section 2. Exercise of Warrant. Subject to the provisions of Section 10,
this Warrant may be exercised in whole or in part, at any time or from time to
time, during the Exercise Period, by presentation and surrender hereof to the
Company at its principal office at the address set forth on the signature page
hereof (or at such other address as the Company may hereafter notify the Holder
in writing), or at the office of its stock transfer agent or warrant agent, if
any, with the Warrant Exercise Form annexed hereto duly executed and accompanied
by proper payment of the Exercise Price for the number of Warrant Shares
specified in such form. The Exercise Price shall be paid in cash, in currency of
the United States of America. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Warrant Exercise Form, together with the applicable Exercise
Price, at such office, in proper form for exercise, the Holder shall be deemed
to be the holder of record of the Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance or delivery of certificates representing
Warrants or Warrant Shares in a name other than that of the Holder at the time
of surrender for exercise and, until the payment of such tax, shall not be
required to issue such Warrant Shares.
Section 3. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise of this Warrant. All such
shares shall be duly authorized and, when issued upon such exercise, shall be
validly issued, fully paid and nonassessable, free and clear of all liens,
security interests, charges and other encumbrance or restrictions on sale and
free and clear of all preemptive rights, subject, however, to the provisions of
Section 10.
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Section 4. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of such fractional share, determined as
follows:
(i) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such an exchange, the
current market value shall be the last reported sale price of the Common
Stock on such exchange on the last Business Day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the mean
of the closing bid and asked prices for such day on such exchange; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the last
bid and asked prices reported on the last Business Day prior to the date
of the exercise of this Warrant (A) by the Nasdaq National Market or (B)
by the Nasdaq Small Cap market or (C) if reports are unavailable under
clause (A) or (B) above by the National Quotation Bureau Incorporated; or
(iii) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount determined in such reasonable
manner as may be prescribed by the Board of Directors of the Company.
Section 5. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant
is exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company for other Warrants of different
denominations, entitling the Holder or Holders thereof to purchase in the
aggregate the same number of Warrant Shares. The Holder of this Warrant shall be
entitled without obtaining the consent of the Company, to assign its interest in
this Warrant in whole or in part to any person or persons, subject to the
provisions of Section 10. Subject to the provisions of Section 10, upon
surrender of this Warrant to the Company, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay any transfer tax, the Company
shall, without charge, execute and deliver a new Warrant or Warrants in the name
of the assignee or assignees named in such instrument of assignment and, if the
Holder's entire interest is not being assigned, in the name of the Holder, and
this Warrant shall promptly be cancelled. This Warrant may be divided or
combined with other Warrants that carry the same rights upon presentation hereof
at the office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof. The term "Warrant" as used herein includes any Warrants into
which this Warrant may be divided or for which it may be exchanged. Upon receipt
by the Company of evidence satisfactory to it of the loss, theft, destruction
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or mutilation of this Warrant, and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and cancellation
of this Warrant, if mutilated, the Company shall execute and deliver a new
Warrant of like tenor and date.
Section 6. Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a stockholder in the Company, either at law or
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
Section 7. Anti-dilution Provisions. In case the Company shall, while this
Warrant remains in effect, (i) declare a dividend or make a distribution on its
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class) other than dividends paid in
respect of the Company's Series A preferred shares, (ii) subdivide shares of its
Common Stock into a greater number of shares, (iii) combine its outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock by reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the Holder shall be entitled to purchase
the aggregate number and kind of shares which, if the Warrant had been exercised
immediately prior to such event, the Holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination or reclassification; and the Exercise Price shall
automatically be adjusted immediately after the record date, in the case of a
dividend or distribution, or the effective date, in the case of a subdivision,
combination or reclassification, to allow the purchase of such aggregate number
and kind of shares. Such adjustments shall be made successively whenever any
event listed above shall occur.
No adjustment pursuant to this Section 7 in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment would require an
increase or decrease of at least one whole share; provided, however, that any
adjustments which by reason of this sentence are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 7 shall be made to the nearest share. In the
event that at any time, as a result of an adjustment made pursuant to this
Section 7, the Holder shall become entitled to receive any shares of the capital
stock of the Company other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in this
Section 7, and the provisions of this Warrant with respect to the Common Stock
shall apply on like terms to any such other shares.
Section 8. Officers' Certificate. Whenever the number of Warrant Shares
purchasable hereunder shall be adjusted as required by the provisions of Section
7, the Company shall forthwith file in the custody of its Secretary or an
Assistant Secretary at
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its principal office an officers' certificate showing the adjusted number of
Warrant Shares purchasable hereunder determined as herein provided, setting
forth in reasonable detail the facts requiring such adjustment and the manner of
computing such adjustment. Each such officers' certificate shall be signed by
the chairman, president or chief financial officer of the Company and by the
secretary or any assistant secretary of the Company. Each such officers'
certificate shall be made available at all reasonable times for inspection by
the Holder or any holder of a Warrant executed and delivered pursuant to Section
4 hereof and the Company shall, forthwith after each such adjustment, mail a
copy, by certified mail, of such certificate to the Holder or any such holder.
Section 9. Reclassification, Reorganization, Consolidation or Merger. In
case of any Reorganization Transaction (as hereinafter defined), the Company
shall, as a condition precedent to such transaction, cause effective provisions
to be made so that the Holder shall have the right thereafter, by exercising
this Warrant, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization Transaction by a
holder of the number of shares of Common Stock that might have been received
upon exercise of this Warrant immediately prior to such Reorganization
Transaction. Any such provision shall include provision for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 9 shall similarly apply
to successive Reorganization Transactions. For purposes of this Section 9,
"Reorganization Transaction" shall mean (excluding any transaction covered by
Section 7) any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock and other than a change in the par
value of the Common Stock) or any consolidation or merger of the Company with or
into another corporation (other than a merger in which the Company is the
continuing corporation and that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock issuable
upon exercise of this Warrant) or any sale, lease transfer or conveyance to
another corporation of the property and assets of the Company as an entirety.
Section 10. Transfer to Comply with the Securities Act of 1933. The
Holder, by his acceptance hereof, represents and warrants that he is acquiring
the Warrants and any Warrant Shares for investment purposes, for his own account
and not in conjunction with any other person, directly or indirectly, and not
with an intent to sell or distribute the Warrants or any Warrant Shares except
in compliance with applicable United States federal and state securities law in
a manner which would not result in the issuance of the Warrants being treated as
a public offering. This Warrant and the Warrant Shares may be transferred and
assigned; provided, however, that neither this Warrant nor any of the Warrant
Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in
whole or in part, except in compliance with applicable United States federal and
state securities laws and the
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terms and conditions hereof. Each Certificate for Warrant Shares issued upon
exercise of this Warrant, unless at the time of exercise such Warrant Shares are
registered under the Act, shall bear the following legend:
THIS CERTIFICATE AND THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER THIS CERTIFICATE NOR
SUCH SECURITIES NOR ANY INTEREST OR PARTICIPATION THEREIN MAY BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER
TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF
1933 AND THE APPLICABLE RULES AND REGULATIONS THEREUNDER.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Company, the securities represented thereby need no
longer be subject to the restriction contained herein. The provisions of this
Section 10 shall be binding upon all subsequent holders of certificates bearing
the above legend and all subsequent holders of this Warrant, if any.
Section 11. Registration Rights. The Holder shall be entitled to the same
rights as the holders of Unit Warrants to registration of the offering of such
Holder's Warrant Shares under the Act.
Section 12. Listing on Securities Exchanges. The Company shall use its
best efforts to list the Warrant Shares on each national securities exchange on
which any Common Stock may at any time be listed, subject to official notice of
issuance upon the exercise of this Warrant, and shall use its best efforts to
maintain, so long as any other shares of its Common Stock shall be so listed,
such listing of all shares of Common Stock from time to time issuable upon the
exercise of this Warrant; and the Company shall use its best efforts to so list
on each national securities exchange, and shall use its best efforts to maintain
such listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of capital stock of
the same class shall be listed on such national securities exchange by the
Company. Any such listing shall be at the Company's expense.
Section 13. Availability of Information. The Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the
extent it is required to do so under the Exchange Act. The Company shall also
cooperate with each Holder of any Warrants and holder of any Warrant Shares in
supplying such information as may be necessary for such holder to complete and
file any information reporting forms currently or hereafter required by the
Securities and Exchange Commission as a condition to the availability of an
exemption from the Act for the sale of any Warrants or Warrant
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Shares. The provisions of this Section 13 shall survive termination of this
Warrant, whether upon exercise of this Warrant in full or otherwise.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of _________________.
RSL COMMUNICATIONS, LTD.
By: _______________________________
Title:
Address:
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WARRANT EXERCISE FORM
Dated ________________, 20__
The undersigned hereby irrevocably elects to exercise the within Warrant
to the extent of purchasing ___________ shares of Common Stock and hereby makes
payment of ______________ in payment of the exercise price thereof.
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INSTRUCTIONS FOR REGISTRATION OF STOCK
Name
________________________________________________________________________________
(please typewrite or print in block letters)
Address
________________________________________________________________________________
Signature _________________________________________________
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ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________________________ hereby sells,
assigns and transfers unto
Name
________________________________________________________________________________
(please typewrite or print in block letters)
Address
________________________________________________________________________________
its right to purchase _____________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint______________________
___________________________________ Attorney, to transfer the same on the books
of the Company, with full power of substitution in the premises.
Date: _______________, 19__
Signature __________________________
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