Exhibit 10.2
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WARRANT REGISTRATION RIGHTS AGREEMENT
between
RSL COMMUNICATIONS, LTD.
and
THE CHASE MANHATTAN BANK,
as Warrant Agent
Dated as of October 3, 1996
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WARRANT REGISTRATION RIGHTS AGREEMENT
WARRANT REGISTRATION RIGHTS AGREEMENT, dated as of October 3, 1996
(this "Agreement"), between RSL COMMUNICATIONS, LTD., a Bermuda corporation (the
"Company") and THE CHASE MANHATTAN BANK, as warrant agent (the "Warrant Agent").
Pursuant to the terms of a Placement Agreement dated as of September
30, 1996 (the "Placement Agreement"), among the Company, RSL Communications PLC
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), as manager (the
"Manager"), for itself and the other placement agents named therein
(collectively with the Manager, the "Placement Agents"), the Company has agreed
to issue and sell to the Placement Agents an aggregate of 300,000 warrants
(each, a "Warrant"), each Warrant initially entitling the holder thereof to
purchase 1.815 shares of Class A Common Shares (as defined below) of the Company
at an exercise price of $.01 per Class A Share, as part of 300,000 units (the
"Units"), each Unit consisting of $1,000 principal amount of Senior Notes due
2006 of RSL Communications PLC, a wholly owned subsidiary of the Company (each a
"Note" and collectively, the "Notes") to be issued pursuant to the provisions of
an Indenture dated as of the date hereof among RSL Communications PLC, as issuer
(the "Note Issuer"), the Company, as guarantor, and The Chase Manhattan Bank, as
trustee, and one Warrant. The Note and the Warrant included in each Unit will
become separately transferable at the close of business upon the earliest to
occur of (i) the date that is 180 days after the Closing Date (as defined
below), (ii) the commencement of an exchange offer with respect to the Notes
undertaken pursuant to the Notes Registration Rights Agreement (as defined
below) or (iii) the effectiveness of a shelf registration statement with respect
to resales of the Notes (the "Separation Date").
In consideration of the foregoing and of the mutual agreements
contained herein and in the Placement Agreement, the Company and the Warrant
Agent hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Auditors" means, at any time, the independent auditors of the
Company at such time.
"Board" means the board of directors of the Company from time to
time.
"Class A Common Stock" means the Class A common shares, par value
$.01 per share, of the Company.
"Class A Shares" means the shares of the Class A Common Stock of the
Company.
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"Closing Date" means the date hereof.
"Comfort Letter" has the meaning specified in Section 3 hereof.
"Commission" means the United States Securities and Exchange
Commission.
"Company" means RSL Communications, Ltd., a Bermuda corporation.
"Company IPO Shares" has the meaning specified in Section 2 hereof.
"Cutback Notice" has the meaning specified in Section 2 hereof.
"Expiration Date" means the tenth anniversary of the date hereof.
"Holders" means the record holders of the Warrants and the holders
of Class A Shares (or other securities) received upon exercise thereof.
"Includible Secondary Shares" has the meaning specified in Section 2
hereof.
"Indenture" means the Indenture, dated as of October 3, 1996, among
the Company, RSL Communications PLC and the Warrant Agent.
"Manager" has the meaning specified in the recitals to this
Agreement.
"managing underwriter" has the meaning specified in Section 2
hereto.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" has the meaning specified in the recitals to this
Agreement.
"Note Issuer" has the meaning specified in the recitals to this
Agreement.
"Notes" has the meaning specified in the recitals to this Agreement.
"Opinion" has the meaning specified in Section 3 hereof.
"Other IPO Shares" has the meaning specified in Section 2 hereof.
"Piggy-back Registration Rights" has the meaning specified in
Section 2 hereof.
"Placement Agents" has the meaning specified in the recitals to this
Agreement.
"Placement Agreement" has the meaning specified in the recitals to
this Agreement.
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"Registration Statement" has the meaning specified in Section 2
hereof.
"Resale Shelf" has the meaning specified in Section 3 hereof.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Separation Date" has the meaning specified in the recitals to this
Agreement.
"Underlying Securities" shall mean the Class A Shares issuable upon
exercise of the Warrants or such other securities as shall be issuable upon the
exercise of the Warrants, pursuant to the Warrant Agreement.
"Units" has the meaning specified in the recitals to this Agreement.
"Warrant" has the meaning specified in the recitals to this
Agreement.
"Warrant Agent" has the meaning specified in the preamble to this
Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of October
3, 1996 between the Company and the Warrant Agent.
"Warrant Shares" has the meaning specified in Section 2 hereof.
"Warrant Registration Statement" has the meaning specified in
Section 3 hereof.
2. Piggy-Back Registration Rights.
(a) If the Company proposes to file a Registration Statement with
the Commission respecting an offering of any of its equity securities (other
than an offering registered solely on Form S-4 or S-8 or any successor form
thereto and other than the initial public offering of its equity securities if
no shareholder of the Company participates therein), the Company shall give
prompt written notice to all the Holders of Warrants or Class A Shares received
upon exercise thereof at least 30 days prior to the initial filing of the
registration statement relating to such offering (the "Registration Statement").
Each such Holder shall have the right, within 20 days after delivery of such
notice, to request in writing that the Company include all or a portion of such
the Class A Shares issuable upon exercise of such Holder's Warrants or such
other securities as shall be issuable upon the exercise of the Warrants,
pursuant to the Warrant Agreement, ("Warrant Shares") in such Registration
Statement ("Piggy-back Registration Rights"). The Company shall include in the
public offering all of the Warrant Shares that a Holder has requested be
included, unless the underwriter for the public offering or the underwriter
managing the public offering (in either case, the "managing underwriter")
delivers
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a notice (a "Cutback Notice") pursuant to Section 2(b) or 2(c) hereof. The
managing underwriter may deliver one or more Cutback Notices at any time prior
to the execution of the underwriting agreement for the public offering.
(b) If a proposed public offering includes both securities to be
offered for the account of the Company ("Company IPO Shares") and shares to be
sold by shareholders, the provisions of this Section 2(b) shall be applicable if
the managing underwriter delivers a Cutback Notice stating that, in its opinion,
the number of Class A Shares that selling shareholders propose to sell therein,
whether or not such selling shareholders have the right to include shares
therein (the "Other IPO Shares"), plus the number of Warrant Shares that the
Holders have requested to be sold therein, plus the Company IPO Shares, exceeds
the maximum number of shares specified by the managing underwriter in such
Cutback Notice that may be distributed without adversely affecting the price,
timing or distribution of the Company IPO Shares. Such maximum number of shares
that may be so sold, excluding the Company IPO Shares, are referred to as the
"Includible Shares."
If the managing underwriter delivers such Cutback Notice, the
Company shall be entitled to include all of the Company IPO Shares in the public
offering and each requesting Holder shall be entitled to include in the public
offering up to its pro rata portion of the Includible Shares and in priority to
the inclusion of any Other IPO Shares that are proposed to be sold in such
public offering. No shareholder that proposes to sell Other IPO Shares in the
proposed initial public offering may sell any such shares therein unless all
Warrant Shares requested by the Holders to be sold therein are so included.
(c) If a proposed public offering is entirely a secondary offering,
the provisions of this Section 2(c) shall be applicable if the managing
underwriter delivers a Cutback Notice stating that, in its opinion, the
aggregate number of Warrant Shares and Other IPO Shares proposed to be sold
therein exceeds the maximum number of shares (the "Includible Secondary Shares")
specified by the managing underwriter in such Cutback Notice that may be
distributed without adversely affecting the price, timing or distribution of the
Class A Shares being distributed. If the managing underwriter delivers such
Cutback Notice, each requesting Holder shall be entitled to include in the
public offering up to its pro rata portion of the Includible Shares and in
priority to the inclusion of any Other IPO Shares that are proposed to be sold
in such public offering. No shareholder that proposes to sell Other IPO Shares
in the proposed initial public offering may sell any such shares therein unless
all Warrant Shares requested by the Holders to be sold therein are so included.
(d) The underwriting agreement for such public offering shall
provide that each requesting Holder shall have the right to sell its Warrant
Shares to the underwriters and that the underwriters shall purchase the Warrant
Shares at the price paid by the underwriters for the Class A Shares sold by the
Company and/or selling shareholders, as the case may be.
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3. Shelf Registration.
(a) If only the Company sells Class A Shares in an initial public
offering or all of the Warrant Shares have not been sold in a public offering,
the Company shall use its reasonable best efforts to cause to be filed pursuant
to Rule 415 under the Securities Act a shelf registration statement on the
appropriate form (the "Warrant Registration Statement") covering the issuance of
the Warrant Shares upon exercise of the Warrants and shall use its reasonable
best efforts to cause the Warrant Registration Statement to become effective
under the Securities Act within 180 days after the closing date of the initial
public offering; provided, however, that (1) in no event may the Warrant
Registration Statement be declared effective prior to the first anniversary of
the Closing Date and (2) if the Commission shall request that the Company
register the resale of the Warrant Shares instead of the issuance thereof, the
Warrant Registration Statement shall register such resale as opposed to such
issuance. The Company shall use reasonable efforts to keep the Warrant
Registration Statement continuously effective until the earlier of (i) such time
as all Warrants have been exercised thereunder or all Warrant Shares have been
sold thereunder, as the case may be, and (ii) the third anniversary of the
Closing Date. Prior to filing the Warrant Registration Statement or any
amendment thereto, the Company shall provide a copy thereof to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and its counsel and afford them a reasonable time to comment thereon.
(b) If the Warrant Registration Statement shall register the sale of
the Warrant Shares (a "Resale Shelf") as provided in Section 3(a) above, the
Company agrees to:
(i) make available for inspection by a representative of the
Holders, any underwriter participating in any disposition pursuant to such
Resale Shelf and attorneys and accountants designated by the Holders, at
reasonable times and in a reasonable manner, financial and other records,
documents and properties of the Company that are pertinent to the conduct
of due diligence, and cause the officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with a
Resale Shelf;
(ii) use its best efforts to cause all Warrant Shares sold under a
Resale Shelf to be listed on any securities exchange or any automated
quotation system on which similar securities issued by the Company are
then listed if requested by the Holders of Warrant Shares representing a
majority of the Warrants originally issued, to the extent such Warrant
Shares satisfy applicable listing requirements;
(iii) provide, at reasonable times, copies of the prospectus
included in such Resale Shelf to Holders that are selling Warrant Shares
pursuant to such Resale Shelf;
(iv) cause to be provided to the Warrant Agent, on behalf of the
Holders and beneficial owners of Warrant Shares, upon the effectiveness of
such Resale Shelf, a
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customary "10b-5" opinion of independent counsel (an "Opinion") and a
customary "cold comfort" letter of independent auditors (a "Comfort
Letter");
(v) cause to be provided to Holders and beneficial owners of Warrant
Shares an Opinion and Comfort Letter with respect to each Form 10-K and
Form l0-Q, including any amendments thereto, that is incorporated by
reference in such Resale Shelf; provided that such Opinion and Comfort
Letter shall not be required to be provided unless Holders or beneficial
owners of Warrant Shares relating to at least 33 1/3% of the Warrants
originally issued shall so request in writing with respect to a specific
sale or sales by such persons of Warrant Shares relating to at least 33
1/3% of the Warrants originally issued; and
(vi) notify the Warrant Agent, for distribution to the Holders, (A)
when the Resale Shelf has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (B) of any request
by the Commission or any state securities authority for amendments and
supplements to the Resale Shelf or of any material request by the
Commission or any state securities authority for additional information
after the Resale Shelf has become effective, (C) of the issuance by the
Commission or any state securities authority of any stop order suspending
the effectiveness of the Resale Shelf or the initiation of any proceedings
for that purpose, (D) if, between the effective date of the Resale Shelf
and the closing of any sale of Warrant Shares covered thereby, the
representations and warranties of the Company contained in any
underwriting agreement, securities sales agreement or other similar
agreement, including this Agreement, relating to disclosure cease to be
true and correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Warrant Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (E) of the happening of any event during the
period the Resale Shelf is effective which makes any statement made in
such Resale Shelf or the related prospectus untrue in any material respect
or which requires the making of any changes in such Resale Shelf or
prospectus in order to make the statements therein not misleading and (F)
of any determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate.
4. Suspension.
Notwithstanding the foregoing, during any consecutive 365-day
period, the Company shall have the privilege to suspend availability of the
Warrant Registration Statement and the related prospectus for (i) up to two
consecutive 30-day periods, except for the consecutive 30-day period immediately
prior to the Expiration Date, if the Board determines in good faith that there
is a valid purpose for such suspension and (ii) five additional, non-consecutive
three-day periods, except during the 30-day period immediately prior to the
Expiration Date, if the Board determines in good faith that the Company cannot
provide
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adequate disclosure during such period due to circumstances beyond its control.
Notice of such suspension shall be given promptly to the Warrant Agent.
5. Blue Sky.
The Company Shall use its reasonable best efforts to register or
qualify the Underlying Securities proposed to be sold or issued pursuant to the
Registration Statement or the Warrant Registration Statement under all
applicable securities or "blue sky" laws of all jurisdictions in the United
States in which any Holder of Warrants may or may be deemed to purchase
Underlying Securities upon the exercise of Warrants or resale of the Warrant
Shares, as the case may be, and shall use its reasonable best efforts to
maintain such registration or qualification through the earlier of (A) the date
upon which all Warrants have been exercised or all Warrant Shares have been
resold, as the case may be, under the Warrant Shelf Registration Statement and
(B) the Expiration Date; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 5, (ii) file any general consent to service of
process or (iii) subject itself to taxation in any jurisdiction if it is not
otherwise so subject.
6. Accuracy of Disclosure.
The Company (and its successors) represents and warrants to each
Holder (and each beneficial owner of a Warrant or Warrant Share) and agrees for
the benefit of each Holder (and each beneficial owner of a Warrant or Warrant
Share) that, except during any period in which the availability of the Warrant
Registration Statement has been suspended, (i) the Warrant Registration
Statement and the documents incorporated by reference therein will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading; and (ii) the prospectus
delivered to such Holder upon its exercise of Warrants or pursuant to which such
Holder sells its Warrant Shares, as the case may be, and the documents
incorporated by reference therein will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
7. Indemnity.
The Company hereby indemnifies each beneficial owner of a Warrant
(whether or not it is, at the time the indemnity provided for in this Section 7
is sought, such a beneficial owner) against all losses, damages or liabilities
which such beneficial owner suffers as a result of any breach, on the date of
any exercise of a Warrant by such beneficial owner or the resale of any Warrant
Share by such Holder, in either case pursuant to the Warrant Registration
Statement, of the representations, warranties or agreements contained in Section
6. Each beneficial owner of a Warrant Share sold pursuant to a Resale Shelf, by
accepting its beneficial
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ownership of a Warrant, hereby (i) agrees to provide the Company with
information with respect to it that the Company reasonably requests in
connection with any Resale Shelf and (ii) indemnifies the Company against any
liability incurred by it as a result of any misstatement of information provided
by such beneficial owner to the Company expressly for inclusion in the Resale
Shelf.
8. Expenses.
All expenses incident to the Company's performance of or compliance
with its obligations under this Agreement will be borne by the Company,
regardless of whether a Registration Statement or Warrant Registration Statement
becomes effective, including without limitation (i) all Commission or National
Association of Securities Dealers, Inc. registration and filing fees, (ii) all
reasonable fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws, (iii) all reasonable expenses of any persons
incurred by or on behalf of the Company in preparing or assisting in preparing,
word processing, printing and distributing any registration statement, any
prospectus, any amendments or supplements thereto and other documents relating
to the performance of and compliance with this Agreement, (iv) the reasonable
fees (including legal fees and expenses) and disbursements of the Warrant Agent,
(v) the reasonable fees and disbursements of counsel for the Company and (vi)
the fees and disbursements, if any, of the Auditors but excluding (x) fees and
disbursements of counsel retained by the participating Holders and (y) the
Holder's share of underwriting discounts and commissions.
9. Miscellaneous.
(a) No Inconsistent Agreements. Each of the Company and the Warrant
Agent represent to the other that it has not entered into, and agrees that on or
after the date of this Agreement it will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Warrants or Warrant
Shares in this Agreement or otherwise conflicts with the provisions hereof. The
Company represents that the rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Company's other issued and outstanding securities under any
agreements.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company and the Warrant Agent have obtained the
written consent of Holders of at least a majority of the outstanding Warrants
affected by such amendment, modification, supplement, waiver or consent;
provided that any amendment, modification or supplement to this Agreement which,
in the good faith opinion of the Board of Directors of the Company (and
evidenced by a resolution of such
9
board), does not materially adversely affect any Holder, shall not be subject to
such requirement for written consent.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 9(c); (ii) if to the Company, initially at the Company's address set
forth in the Indenture and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 9(c); and (iii) if to
the Warrant Agent, initially at the Warrant Agent address set forth in the
Indenture and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 9(c).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation, subsequent Holders; provided that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Warrants in violation of the terms of the Placement Agreement or
the Warrant Agreement. If any transferee of any Holder shall acquire Warrants,
in any manner, whether by operation of law or otherwise, such Warrants shall be
held subject to all of the terms of this Agreement and the Warrant Agreement,
and by taking and holding such Warrants such person shall be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of
this Agreement or the Warrant Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Purchases and Sales of Warrants. The Company shall not, and
shall use their best efforts to cause their affiliates (as defined in Rule 405
under the ▇▇▇▇ ▇▇▇) not to, purchase and then resell or otherwise transfer any
Warrants.
(f) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Warrant Agent, and each Holder shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed
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shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Designation of Process Agent; Submission to Jurisdiction. Each
of the parties hereto hereby agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
herein may be instituted in any U.S. federal or New York State court in the
Borough of Manhattan in the City of New York (each a "New York court") and each
of the parties hereto hereby irrevocably waives any objection it may now or
hereafter have to the laying of venue of any such proceeding and irrevocably
submits to the jurisdiction of such courts and to the courts of its corporate
domicile, with respect to actions brought against it as defendant, in any suit,
action or proceeding. The Company hereby (i) represents that it has irrevocably
designated and appointed RSL Communications N. America, Inc. ("RSL USA"), ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (together with any successor,
the "Process Agent") as its authorized agent in the Borough of Manhattan in the
City of New York upon which process may be served in any such suit, action or
proceeding, or brought under U.S. federal or state securities laws, and
acknowledges that the Process Agent has accepted such designation, (ii) agrees
that prior to any dissolution, liquidation, winding-up or sale of RSL USA, or
incorporation of RSL USA in a jurisdiction outside the United States, it will
cause such obligation of RSL USA to be assumed by (A) CT Corporation System ("CT
Corporation"), ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or (B) any other direct
or indirect subsidiary of the Company organized under the laws of the United
States; provided that such subsidiary also agrees to be bound by the terms of
this subclause (ii) as if such terms applied to such subsidiary, (iii) agrees
that service of process upon the Process Agent, and written notice of such
service to the Company, shall be deemed in every respect effective service of
process upon the Company in any such suit, action or proceeding and (iv) agrees
to take any and all action, including the execution and filing of any and all
such documents and instruments as may be necessary to continue such designation
and appointment of the Process Agent in full force and effect so long as any of
the Notes shall be outstanding.
(j) Governing Law. This Agreement shall be governed by the laws of
the State of New York.
(k) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(l) Waiver of Immunity. To the extent that the Company has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through
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service of notice, attachment prior to judgement, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of their obligations under
this Agreement to the fullest extent permitted by law.
(m) Initial Public Offering. Notwithstanding anything to the
contrary herein contained, if the Company or any of the subsidiaries or any
parent entity of the Company conducts an initial public offering of equity
securities other than Class A Common Shares, the Company will give the Holders
the opportunity to convert such Warrants into warrants to purchase such equity
securities and such Warrant Shares into such equity securities. Such conversion
opportunity will be on terms and conditions determined to be fair and reasonable
by the Company's Board of Directors.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
RSL COMMUNICATIONS, LTD.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
THE CHASE MANHATTAN BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President