EXHIBIT 4.2
EXECUTION COPY
RSL COMMUNICATIONS, LTD.
7 1/2% Series A Convertible Preferred Shares
Registration Rights Agreement
February 22, 2000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ Brothers Inc.
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
c/o Goldman ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
RSL Communications, Ltd., a Bermuda corporation (the "Issuer"),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 7 1/2% Series A
Convertible Preferred Shares (the "Securities"). As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Issuer agrees
with the Purchasers for the benefit of holders (as defined herein) from time to
time of the Transfer Restricted Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Purchase Agreement. As used in this Agreement,
the following defined terms shall have the following meanings:
"Act" or "Securities Act" means the United States Securities Act of
1933, as amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Certificate of Designation" means the certificate of designation with
respect to the Securities as adopted by the Issuer and as amended, modified or
supplemented from time to time in accordance with its terms.
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Common Stock" means the Issuer's Class A common shares, par value
$0.00457 per share.
"Dividend Payment Date" has the meaning assigned thereto in the
Certificate of Designation.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"First Time of Delivery" has the meaning assigned thereto in the
Purchase Agreement.
The term "holder" means, when used with respect to any Security, the
record holder of such Security and, with respect to any Common Stock, the record
holder of such Common Stock.
"Incorporated Document" means any filing made by the Issuer with the
Commission pursuant to Section 13, 14, or 15 of the Exchange Act and
incorporated by reference into the Shelf Registration Statement.
"Managing Underwriters" means the investment banker or investment
bankers and manger or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6(a) hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement
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in reliance upon Rule 430A under the Act) included in the Shelf Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Transfer Restricted
Securities covered by the Shelf Registration Statement and by all other
amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Issuer under the Exchange Act and incorporated by
reference therein.
"Purchase Agreement" means the purchase agreement dated February 14,
2000, between the Purchasers and the Issuer relating to the Securities.
"Purchasers" means the purchasers named in Schedule I to the Purchase
Agreement.
"Registration Default" has the meaning assigned thereto in Section 6(a)
hereof.
"Registration Default Period" means each period during which a
Registration Default has occurred and is continuing.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the Transfer
Restricted Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Issuer pursuant
to the provisions of Section 2 of this Agreement, including the Prospectus
contained therein, any amendments and supplements to such registration
statement, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.
"Special Dividends" has the meaning assigned thereto in Section 7(a)
hereof.
"Time of Delivery" has the meaning assigned thereto in the Purchase
Agreement.
"Transfer Restricted Securities" means all or any portion of the
Securities and the shares of Common Stock issuable upon conversion of such
Securities or in satisfaction of any dividend or other payment on the Securities
until (a) the date on which such security has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf Registration
Statement or (b) the date on which such security is distributed to the public
pursuant to Rule 144 under the Securities Act or may be distributed to the
public pursuant to Rule 144(k) under the Securities Act.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
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The term "underwriter" means any underwriter of Transfer Restricted
Securities in connection with an offering thereof under a Shelf Registration
Statement.
2. Shelf Registration.
(a) The Issuer shall, within 90 calendar days following the First Time
of Delivery, file with the Commission a Shelf Registration Statement relating to
the offer and sale of the Transfer Restricted Securities and, thereafter, shall
use its reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the Act within 180 calendar days following the First
Time of Delivery; provided, however, that no holder shall be entitled to be
named as a selling securityholder in the Shelf Registration Statement or to use
the Prospectus forming a part thereof for resales of Transfer Restricted
Securities unless such holder is an Electing Holder.
(b) The Issuer shall use its reasonable best efforts:
(i) Subject to Section 3(j), to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by holders for resales of Transfer
Restricted Securities for a period of two years from the last Time of
Delivery, or such shorter period that will terminate when there are no
Transfer Restricted Securities outstanding other than Transfer
Restricted Securities held by Affiliates of the Issuer (in either case,
such period being referred to herein as the "Effectiveness Period") ;
(ii) After the Effective Time of the Shelf Registration
Statement, promptly upon the request of any holder of Transfer
Restricted Securities that is not then an Electing Holder, to take any
action reasonably necessary to enable such holder to use the Prospectus
forming a part thereof for resales of Transfer Restricted Securities,
including, without limitation, any action necessary to identify such
holder as a selling securityholder in the Shelf Registration Statement;
provided, however, that nothing in this subparagraph shall relieve such
holder of the obligation to return a completed and signed Notice and
Questionnaire to the Issuer in accordance with Section 3(a)(2) hereof;
and
(iii) If at any time the Securities, pursuant to Section 7 of
the Certificate of Designation, are convertible into securities other
than Common Stock, the Issuer shall, or shall cause any successor under
the Certificate of Designation to, cause such securities to be included
in the Shelf Registration Statement no later than the date on which the
Securities may then be convertible.
The Issuer shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the Effectiveness Period if the Issuer
voluntarily takes any action that would result in Electing Holders not being
able to offer and sell any of their Transfer Restricted Securities during such
period, unless (i) such action is required by applicable law, or (ii) the Issuer
determines based upon the advice of counsel that it is advisable to disclose in
the Shelf Registration Statement a financing, acquisition or other corporate
transaction, and the Board of Directors of the Issuer shall have determined in
good faith that such disclosure is not in the best interests of the Issuer and
its shareholders, and, in the case of clause (i) above, the Issuer thereafter
promptly complies with the requirements of paragraph 3(j) below.
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3. Registration Procedures. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the Effective Time of
the Shelf Registration Statement, the Issuer shall mail the Notice and
Questionnaire to the holders of Transfer Restricted Securities. No holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to use the
Prospectus forming a part thereof for resales of Transfer Restricted Securities
at any time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Issuer by the deadline for response set forth therein;
provided, however, holders of Transfer Restricted Securities shall have at least
28 calendar days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and Questionnaire
to the Issuer.
(ii) After the Effective Time of the Shelf Registration Statement,
the Issuer shall, upon the request of any holder of Transfer
Restricted Securities that is not then an Electing Holder,
promptly send a Notice and Questionnaire to such holder. The
Issuer shall not be required to take any action to name such
holder as a selling securityholder in the Shelf Registration
Statement or to enable such holder to use the Prospectus
forming a part thereof for resales of Transfer Restricted
Securities until such holder has returned a completed and
signed Notice and Questionnaire to the Issuer.
(iii) term "Electing Holder" shall mean any holder of Transfer
Restricted Securities that has returned a completed and signed
Notice and Questionnaire to the Issuer in accordance with
Section 3(a)(i) or 3(a)(ii) hereof, but only so long as such
holder holds any Transfer Restricted Securities that such
holder has elected pursuant to such Notice and Questionnaire
to include in the Shelf Registration Statement.
(b) The Issuer shall furnish to each Electing Holder, prior to the
Effective Time, a copy of the Shelf Registration Statement initially filed with
the Commission, and shall furnish to such holders, prior to the filing thereof
with the Commission, copies of each amendment thereto and each amendment or
supplement, if any, to the Prospectus included therein, and shall use its best
efforts to reflect in each such document, at the Effective Time or when so filed
with the Commission, as the case may be, such comments as such holders and their
respective counsel reasonably may propose; provided, however, that the Issuer
shall be required to furnish an Incorporated Document only as promptly as
practicable following its filing with the Commission.
(c) The Issuer shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statement and any amendment thereto and
the Prospectus forming part thereof and any amendment or supplement thereto (and
each report or other document incorporated therein by reference in each case)
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming part of the
Shelf Registration Statement, and any amendment or
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supplement to such Prospectus, does not at any time during the Effectiveness
Period include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) The Issuer shall notify the Purchasers and their counsel when the
Shelf Registration Statement and any amendment thereto has been filed with the
Commission and of any request by the Commission for amendments or supplements to
the Shelf Registration Statement or the Prospectus included therein or for
additional information.
The Issuer also shall promptly advise each Electing Holder, and shall confirm
such advice in writing if so requested by any such holder:
(i) when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(iii) of the receipt by the Issuer of any notification with
respect to the suspension of the qualification of the shares included
in the Shelf Registration Statement for sale in any jurisdiction or the
initiation of any proceeding for such purpose; and
(iv) of the suspension of the use of the Prospectus pursuant
to Section 3(j) or of the happening of any event or the existence of
any state of facts that requires the making of any changes in the Shelf
Registration Statement or the Prospectus included therein so that, as
of such date, such Shelf Registration Statement and Prospectus do not
contain an untrue statement of a material fact and do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to such holders to suspend the
use of the Prospectus until the requisite changes have been made);
provided that such notice shall not be required to specify the nature
of the event or circumstances giving rise to such notice requirement.
(e) The Issuer shall use its best efforts to prevent the issuance, and
if issued to obtain the withdrawal, of any order suspending the effectiveness of
the Shelf Registration Statement at the earliest possible time.
(f) The Issuer shall furnish to each Electing Holder at the request of
such Holder, without charge, at least one copy of the Shelf Registration
Statement and all post-effective amendments thereto, including financial
statements and schedules, and all reports, other documents and exhibits that are
filed with or incorporated by reference in the Shelf Registration Statement.
(g) The Issuer shall, during the Effectiveness Period, deliver to each
Electing Holder, without charge, as many copies of the Prospectus (including
each preliminary Prospectus) included in the Shelf Registration Statement and
any amendment or
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supplement thereto as such Electing Holder may reasonably request; and the
Issuer consents (except during the continuance of any event described in Section
3(d)(v) above) to the use of the Prospectus and any amendment or supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the Transfer Restricted Securities covered by the Prospectus and any
amendment or supplement thereto during the Effectiveness Period.
(h) Prior to any offering of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, the Issuer shall (i) register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Transfer Restricted Securities
for offer and sale under the securities or "blue sky" laws of such jurisdictions
within the United States as any Electing Holders may reasonably request, (ii)
keep such registrations or qualifications in effect and comply with such laws so
as to permit the continuance of offers and sales in such jurisdictions for so
long as may be necessary to enable any Electing Holder or underwriter, if any,
to complete its distribution of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, and (iii) take any and all other actions necessary
or advisable to enable the disposition in such jurisdictions of such Transfer
Restricted Securities; provided, however, that in no event shall the Issuer be
obligated to (A) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to so qualify but
for this Section 3(h) or (B) file any general consent to service of process or
subject itself to taxation in any jurisdiction where as of the date hereof it
has not filed or is not so subject.
(i) Unless any Transfer Restricted Securities shall be in book-entry
only form, the Issuer shall cooperate with the Electing Holders to facilitate
the timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold pursuant to the Shelf Registration Statement,
which certificates, if so required by any securities exchange upon which any
Transfer Restricted Securities are listed, shall be penned, lithographed or
engraved, or produced by any combination of such methods, on steel engraved
borders, and which certificates shall be free of any restrictive legends and in
such permitted denominations and registered in such names as Electing Holders
may request in connection with the sale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any fact or event contemplated by paragraph
3(d)(v) above, the Issuer shall promptly prepare a post-effective amendment or
supplement to the Shelf Registration Statement or the Prospectus, or any
document incorporated therein by reference, or file any other required document
so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, if the Issuer determines that it is
advisable to disclose in the Shelf Registration Statement a financing,
acquisition or other corporate transaction, and the Board of Directors of the
Issuer shall have determined in good faith that such disclosure would not be in
the best interests of the Issuer and its stockholders, the Issuer shall not be
required to prepare and file such amendment, supplement or document for such
period or periods as the Board of Directors of the Issuer shall have determined
in good faith is in the best interests of the Issuer and shall be entitled to
suspend the availability of the Shelf Registration Statement, provided further,
however that such period or periods of
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suspension shall not exceed 90 days in the aggregate in any consecutive 365-day
period. If the Issuer notifies the Electing Holders of the occurrence of any
event contemplated by paragraph 3(d)(v) above, each Electing Holder agrees, as a
consequence of the inclusion of any of such holder's Transfer Restricted
Securities in the Shelf Registration Statement, to suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made. The
Issuer shall promptly notify each Electing Holder of the cessation of any
suspension hereunder.
(k) The Issuer shall use its best efforts to comply with all applicable
Rules and Regulations, and to make generally available to its shareholders as
soon as practicable, but in any event not later than eighteen months after (i)
the effective date (as defined in Rule 158(c) under the Securities Act) of the
Shelf Registration Statement, (ii) the effective date of each post-effective
amendment to the Shelf Registration Statement, and (iii) the date of each filing
by the Issuer with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Shelf Registration Statement, an earning
statement of the Issuer and its subsidiaries complying with Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Issuer, Rule 158).
(l) In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Issuer shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as the Managing Underwriters reasonably
agree should be included therein and to which the Issuer does not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(m) The Issuer shall enter into such customary agreements (including an
underwriting agreement in customary form in the event of an underwritten
offering conducted pursuant to Section 6 hereof) and take all other appropriate
action in order to expedite and facilitate the registration and disposition of
the Transfer Restricted Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof with respect to all parties to be indemnified pursuant
to Section 5 hereof.
(n) The Issuer shall:
(i) (A) make reasonably available for inspection by Electing
Holders, any underwriter participating in any disposition pursuant to
the Shelf Registration Statement, and any attorney or accountant
retained by such holders or any such underwriter all relevant financial
and other records, pertinent corporate documents and properties of the
Issuer and its subsidiaries, and (B) cause the Issuer's officers,
directors and employees to supply all information reasonably requested
by such holders or any such underwriter, attorney or accountant in
connection with the Shelf Registration Statement, in each case, as is
customary for similar due diligence examinations; provided, however,
that all records, information and documents that are designated in
writing by the Issuer, in good faith, as confidential shall be kept
confidential by such holders and any such underwriter, attorney or
accountant, unless such disclosure is made in
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connection with a court proceeding or required by law, or such records,
information or documents become available to the public generally
(other than in violation of this Agreement) or through a third party
without an accompanying obligation of confidentiality; and provided
further that, if the foregoing inspection and information gathering
would otherwise disrupt the Issuer's conduct of its business, such
inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of the Electing Holders and the
other parties entitled thereto by one counsel designated by and on
behalf of Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, make such representations and warranties
to the holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are customarily
made by the Issuer to underwriters in primary underwritten offerings of
equity and covering matters including, but not limited to, those set
forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the Issuer
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
holder participating in such underwritten offering and the
underwriters, covering such matters as are customarily covered in
opinions requested in primary underwritten offerings of equity and such
other matters as may be reasonably requested by such holders and
underwriters (it being agreed that in addition to the matters to be
covered by such opinions there shall be included a statement of counsel
to the effect that, as of the date of the opinion and as of the
Effective Time of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, while such
counsel is not passing upon, and shall ▇▇▇▇ no responsibility for, the
accuracy or completeness of the Shelf Registration Statement or the
Prospectus, such counsel has no reason to believe that, the Shelf
Registration Statement, the Prospectus or such amendment thereto
contains an untrue statement of material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading ;
(iv) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
thereof from the independent public accountants of the Issuer (and, if
necessary, from the independent public accountants of any subsidiary of
the Issuer or of any business acquired by the Issuer for which
financial statements and financial data are, or are required to be,
included in the Shelf Registration Statement), addressed to each holder
participating in such underwritten offering (if such holder has
provided such letter, representations or documentation, if any,
required for such cold comfort letter to be so addressed) and the
underwriters, in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
primary underwritten offerings; and
(v) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
thereof from the independent public accountants of the Issuer (and, if
necessary, from the
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independent public accountants of any subsidiary of the Issuer or of
any business acquired by the Issuer for which financial statements and
financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each holder participating in such
underwritten offering (if such holder has provided such letter,
representations or documentation, if any, required for such cold
comfort letter to be so addressed) and the underwriters, in customary
form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings.
(o) The Issuer will use its reasonable best efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed for quotation on
the National Association of Securities Dealers Automated Quotations National
Market System or other stock exchange or trading system on which the Common
Stock primarily trades on or prior to the Effective Time of the Shelf
Registration Statement hereunder.
(p) In the event that any broker-dealer registered under the Exchange
Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or
any successor provision thereto)) of the Issuer or has a "conflict of interest"
(as defined in Rule 2720(b)(7) of the NASD Rules (or any successor provision
thereto)) and such broker-dealer shall underwrite, participate as a member of an
underwriting syndicate or selling group or assist in the distribution of any
Transfer Restricted Securities covered by the Shelf Registration Statement,
whether as a holder of such Transfer Restricted Securities or as an underwriter,
a placement or sales agent or a broker or dealer in respect thereof, or
otherwise, the Issuer shall assist such broker-dealer in complying with the
requirements of the NASD Rules, including, without limitation, by (A) engaging a
"qualified independent underwriter" (as defined in Rule 2720(b)(15) of the NASD
Rules (or any successor provision thereto)) to participate in the preparation of
the registration statement relating to such Transfer Restricted Securities, to
exercise usual standards of due diligence in respect thereto and to recommend
the public offering price of such Transfer Restricted Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof, and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.
(q) The Issuer shall use its best efforts to take all other steps
necessary to effect the registration, offering and sale of the Transfer
Restricted Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. The Issuer shall bear all fees and expenses
incurred in connection with the performance of its obligations under Sections 2,
3 and 6 hereof. In addition, in the event of an underwritten offering of
Transfer Restricted Securities conducted pursuant to Section 6 hereof, or if in
any other event the Issuer requires that inspection and information gathering be
coordinated by counsel for the Electing Holders as provided in Section 3(n)(i)
hereof, the Issuer shall pay the fees and expenses of a single counsel, which
shall be Cravath, Swaine & ▇▇▇▇▇, unless another counsel shall be selected by
the Electing Holders of more than 50% of the Transfer Restricted Securities to
be included in such underwritten offering (or, in any such other event, included
in the Shelf Registration Statement) to represent them.
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5. Indemnification and Contribution.
(a) Indemnification by the Issuer. Upon the registration of the
Transfer Restricted Securities pursuant to Section 2 hereof, the Issuer shall
indemnify and hold harmless each Electing Holder and each underwriter, selling
agent or other securities professional, if any, which facilitates the
disposition of Transfer Restricted Securities, and each of their respective
officers and directors and each person who controls such Electing Holder,
underwriter, selling agent or other securities professional within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes referred to as an "Indemnified Person") against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration Statement under
which such Transfer Restricted Securities are to be registered under the
Securities Act, or any Prospectus contained therein or furnished by the Issuer
to any Indemnified Person, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Issuer hereby agrees to reimburse such
Indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Issuer shall not be liable to
any such Indemnified Person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such Shelf
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Issuer by such
Indemnified Person expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
holder's Transfer Restricted Securities in such Shelf Registration Statement,
and each underwriter, selling agent or other securities professional, if any,
which facilitates the disposition of Transfer Restricted Securities shall agree,
as a consequence of facilitating such disposition of Transfer Restricted
Securities, severally and not jointly, to (i) indemnify and hold harmless the
Issuer, its directors, officers who sign any Shelf Registration Statement and
each person, if any, who controls the Issuer within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Issuer or such other persons
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in such Shelf Registration Statement or Prospectus, or
any amendment or supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Issuer by such holder,
underwriter, selling agent or other securities professional expressly for use
therein, and (ii) reimburse the Issuer for any legal or other expenses
11
reasonably incurred by the Issuer in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or
12
other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Transfer Restricted Securities registered or
underwritten, as the case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event
will any (i) Electing Holder be required to undertake liability to any person
under this Section 5 for any amounts in excess of the dollar amount of the
proceeds to be received by such holder from the sale of such holder's Transfer
Restricted Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Transfer Restricted Securities are to be registered under the Securities
Act and (ii) underwriter, selling agent or other securities professional be
required to undertake liability to any person hereunder for any amounts in
excess of the discount, commission or other compensation payable to such
underwriter, selling agent or other securities professional with respect to the
Transfer Restricted Securities underwritten by it and distributed to the public.
(f) The obligations of the Issuer under this Section 5 shall be in
addition to any liability which the Issuer may otherwise have to any Indemnified
Person and the obligations of any Indemnified Person under this Section 5 shall
be in addition to any liability which such Indemnified Person may otherwise have
to the Issuer. The remedies provided in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity.
6. Underwritten Offering. Any holder of Transfer Restricted Securities
who desires to do so may sell Transfer Restricted Securities (in whole or in
part) in an underwritten offering; provided that (i) the Electing Holders of at
least a majority in aggregate principal amount of the Transfer Restricted
Securities then covered by the Shelf Registration Statement shall request such
an offering and (ii) at least such aggregate principal amount of such Transfer
Restricted Securities shall be included in such offering; and provided further
that the Issuer shall not be obligated to cooperate with more than one
underwritten offering during the Effectiveness Period. Upon receipt of such a
request, the Issuer shall provide all holders of Transfer Restricted Securities
written notice of the request, which notice shall inform such holders that they
have the opportunity to participate in the offering. In any such underwritten
offering, the investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Transfer Restricted Securities to be included
in such offering; provided, however, that such investment bankers and managers
and underwriting arrangements must be reasonably satisfactory to the Issuer. No
holder may participate in any underwritten offering contemplated hereby unless
(a) such holder agrees to sell such holder's Transfer Restricted Securities to
be included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, and (c) if such holder is not then an Electing
13
Holder, such holder returns a completed and signed Notice and Questionnaire to
the Issuer in accordance with Section 3(a)(ii) hereof within a reasonable amount
of time before such underwritten offering. The holders participating in any
underwritten offering shall be responsible for any underwriting discounts and
commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel. The Issuer shall pay all expenses customarily borne by issuers,
including but not limited to filing fees, the fees and disbursements of its
counsel and independent public accountants and any printing expenses incurred in
connection with such underwritten offering. Notwithstanding the foregoing or the
provisions of Section 3(l) hereof, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Transfer
Restricted Securities to be included in an underwritten offering to prepare and
file an amendment or supplement to the Shelf Registration Statement and
Prospectus in connection with an underwritten offering, the Issuer may delay the
filing of any such amendment or supplement for up to 90 days if the Board of
Directors of the Issuer shall have determined in good faith that the Issuer has
a bona fide business reason for such delay.
7. Special Dividends.
(a) The Issuer and the Purchasers agree that the Electing Holders shall
suffer damages if the Issuer fails to fulfill its obligations pursuant to
Section 2 hereof and that it would not be possible to ascertain the extent of
such damages. Accordingly, the Issuer hereby agrees to pay special dividends
("Special Dividends") to each Electing Holder under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration Statement has not been filed
within 90 days of the First Time of Delivery or has not been declared
effective by the Commission within 180 days after the First Time of
Delivery; or
(ii) if the Shelf Registration Statement has been declared
effective by the Commission but, during the Effectiveness Period, is
withdrawn by the Issuer or becomes subject to an effective stop order
issued pursuant to Section 8(d) of the Securities Act suspending the
effectiveness of the Shelf Registration Statement (without being
succeeded by an additional registration statement filed and declared
effective or by a post-effective amendment to such Shelf Registration
Statement that cures such failure and that is itself immediately
declared effective) for any period of ten consecutive trading days that
are also business days or for any 20 trading days that are also
business days in any 180-day period in connection with resales of
Transfer Restricted Securities or if the availability of the Shelf
Registration Statement is suspended by the Issuer pursuant to Section
3(j) hereof (each of the foregoing clauses (i) and (ii), a
"Registration Default").
(b) In the event of each such Registration Default, the Issuer shall
pay Special Dividends to each holder of Transfer Restricted Securities at a per
annum rate of 0.5% of the liquidation preference for any Registration Default
Period. Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Special Dividends with respect to such
Transfer Restricted Securities shall cease (without in any way limiting the
effect of any subsequent Registration Default). A Registration Default
14
under clause 7(a)(i) above shall be cured on the date that the Shelf
Registration Statement is declared effective by the Commission. A Registration
Default under clause 7(a)(ii) above shall be cured on the date the Shelf
Registration Statement is declared effective or becomes usable and the Electing
Holders are provided notice thereof.
(c) Special Dividends, if paid in cash, shall be paid by the Issuer to
the record holders of Transfer Restricted Securities on each Dividend Payment
Date by mailing checks to their registered addresses as they appear in the
Securities register if no such accounts have been specified on or before the
Dividend Payment Date; provided that any Special Dividends accrued with respect
to any Securities or portion thereof called for redemption on a redemption date
or converted into Common Stock on a conversion date prior to the Dividend
Payment Date, shall, in any such event, be paid instead to the holder that
submitted such Securities for redemption or conversion on the applicable
redemption date or conversion date, as the case may be, on such date (promptly
following the conversion date, in the case of conversion of Securities). Each
obligation to pay Special Dividends shall be deemed to commence accruing on the
date of the applicable Registration Default and to cease accruing when all
Registration Defaults have been cured.
(d) All Special Dividends with respect to any of Transfer Restricted
Securities, that remain unpaid when such Securities cease to be Transfer
Restricted Securities or cease to be outstanding, shall remain unpaid
obligations of the Issuer until they have been paid in full.
7. Miscellaneous.
(a) Other Registration Rights. The Issuer may grant registration rights
that would permit any Person that is a third party the right to piggy-back on
any Shelf Registration Statement, provided that if the Managing Underwriter of
any underwritten offering conducted pursuant to Section 6 hereof notifies the
Issuer and the Electing Holders that the total amount of securities which the
Electing Holders and the holders of such piggy-back rights intend to include in
any Shelf Registration Statement is so large as to materially threaten the
success of such offering (including the price at which such securities can be
sold), then the amount, number or kind of securities to be offered for the
account of holders of such piggy-back rights will be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount, number and kind recommended by the Managing Underwriter
prior to any reduction in the amount of Registrable Securities to be included in
such Shelf Registration Statement.
(b) Amendments and Waivers. This Agreement, including this Section
7(a), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Issuer
and the holders of a majority in aggregate liquidation preference of Transfer
Restricted Securities then outstanding. Each holder of Transfer Restricted
Securities outstanding at the time of any such amendment, waiver or consent or
thereafter shall be bound by any amendment, waiver or consent effected pursuant
to this Section 7(b), whether or not any notice, writing or marking indicating
such amendment, waiver or consent appears on the Transfer Restricted Securities
or is delivered to such holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Purchase Agreement.
15
(d) Parties in Interest. The parties to this Agreement intend that all holders
of Transfer Restricted Securities shall be entitled to receive the benefits of
this Agreement and that any holder of Transfer Restricted Securities shall be
bound by the terms and provisions of this Agreement by reason of such election
with respect to the Transfer Restricted Securities which are included in a Shelf
Registration Statement. All the terms and provisions of this Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the
respective successors and assigns of the parties hereto and any holder from time
to time of the Transfer Restricted Securities to the aforesaid extent. In the
event that any transferee of any holder of Transfer Restricted Securities shall
acquire Transfer Restricted Securities, in any manner, whether by gift, bequest,
purchase, operation of law or otherwise, such transferee shall, without any
further writing or action of any kind, be entitled to receive the benefits of
and be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement to the aforesaid extent.
(e) 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 shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(i) Survival. The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Transfer Restricted Securities of such holder.
16
Please confirm that the foregoing correctly sets forth the agreement
between the Issuer and you.
Very truly yours,
RSL Communications, Ltd.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇ Brothers Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
---------------------------
(▇▇▇▇▇▇▇, Sachs & Co.)
On Behalf of Each of the Purchasers
Exhibit A
RSL Communications, Ltd.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE:
The Depository Trust Company ("DTC") has identified you as a
DTC Participant through which beneficial interests in RSL Communications, Ltd.
(the "Issuer") Series A Convertible Preferred Shares (the "Securities") are
held.
The Issuer is in the process of registering the Securities
under the Securities Act of 1933 for resale by the beneficial owners thereof. In
order to have their Securities included in the registration statement,
beneficial owners must complete and return the enclosed Notice of Registration
Statement and Selling Securityholder Questionnaire.
It is important that beneficial owners of the Securities
receive a copy of the enclosed materials as soon as possible as their rights to
have the Securities included in the registration statement depend upon their
returning the Notice and Questionnaire by [ ]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact [Name, address and
telephone number of contact at the Issuer].
18
RSL Communications, Ltd.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Registration Rights Agreement
(the "Registration Rights Agreement") between RSL Communications, Ltd. (the
"Issuer") and the Purchasers named therein. Pursuant to the Registration Rights
Agreement, the Issuer has filed with the United States Securities and Exchange
Commission (the "Commission") a registration statement on Form [S-3] (the "Shelf
Registration Statement") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "Securities Act"), of the Issuer's 7
1/2% Series A Convertible Preferred Shares (the "Securities") and the Class A
common shares, par value $0.01 per share (the "Common Stock"), issuable upon
conversion thereof. A copy of the Registration Rights Agreement is attached
hereto. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Transfer Restricted Securities (as
defined below) is entitled to have the Transfer Restricted Securities
beneficially owned by it included in the Shelf Registration Statement. In order
to have Transfer Restricted Securities included in the Shelf Registration
Statement, this Notice of Registration Statement and Selling Securityholder
Questionnaire ("Notice and Questionnaire") must be completed, executed and
delivered to the Issuer's counsel at the address set forth herein for receipt ON
OR BEFORE . Beneficial owners of Transfer Restricted
Securities who do not complete, execute and return this Notice and Questionnaire
by such date (i) will not be named as selling securityholders in the Shelf
Registration Statement and (ii) may not use the Prospectus forming a part
thereof for resales of Transfer Restricted Securities.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and related Prospectus.
The term "Transfer Restricted Securities" is defined in the
Registration Rights Agreement to mean all or any portion of the Securities and
the shares of Common Stock issuable upon conversion of such Securities or in
satisfaction of any dividend or other payment on the securities until (a) the
date on which such security has been effectively registered under the Securities
Act and disposed of in accordance with the shelf registration statement or (b)
the date on which such security is distributed to the public pursuant to Rule
144 under the Securities Act or may be distributed to the public pursuant to
Rule 144(k) under the Securities Act.
19
ELECTION
The undersigned holder (the "Selling Securityholder") of
Transfer Restricted Securities hereby elects to include in the Shelf
Registration Statement the Transfer Restricted Securities beneficially owned by
it and listed below in Item (3). The undersigned, by signing and returning this
Notice and Questionnaire, agrees to be bound with respect to such Transfer
Restricted Securities by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.
Upon any sale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, the Selling Securityholder will be required to
deliver to the Issuer and Trustee the Notice of Transfer set forth in Appendix A
to the Prospectus. This Notice of Transfer is set forth as Exhibit A to the
Prospectus and as Exhibit B to the Registration Rights Agreement.
The Selling Securityholder hereby provides the following
information to the Issuer and represents and warrants that such information is
accurate and complete:
20
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
--------------------------------------------------------------
(b) Full Legal Name of Registered holder (if not the same as in
(a) above) of Transfer Restricted Securities Listed in Item
(3) below:
--------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Transfer Restricted
Securities Listed in Item (3) below are Held:
--------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
--------------------------------------------------------------
Telephone:-------------------------------
Fax:-------------------------------------
Contact Person:--------------------------
(3) Beneficial Ownership of Securities:
Except as set forth below in this Item (3), the undersigned
does not beneficially own any Securities or shares of Common
Stock issued upon conversion of any Securities.
(a) Principal amount of Transfer Restricted Securities (as defined
in the Registration Rights Agreement) beneficially owned:-----
CUSIP No(s). of such Transfer Restricted Securities:----------
Number of shares of Common Stock (if any) issued upon
conversion of such Transfer Restricted Securities:------------
(b) Principal amount of Securities other than Transfer Restricted
Securities beneficially owned:
--------------------------------------------------------------
CUSIP No(s). of such other Securities:------------------------
Number of shares of Common Stock (if any) issued upon
conversion of such other Securities:--------------------------
(c) Principal amount of Transfer Restricted Securities which the
undersigned wishes to be included in the Shelf Registration
Statement:----------------------------------------------------
CUSIP No(s). of such Transfer Restricted Securities
to be included in the Shelf Registration Statement:-----------
21
Number of shares of Common Stock (if any) issued upon
conversion of Transfer Restricted Securities which are to be
included in the Shelf Registration Statement:-----------------
(4) Beneficial Ownership of Other Securities of the Issuer:
Except as set forth below in this Item (4), the undersigned
Selling Securityholder is not the beneficial or registered
owner of any shares of Common Stock or any other securities of
the Issuer, other than the Securities and shares of Common
Stock listed above in Item (3).
State any exceptions here:
(5) Relationships with the Issuer:
Except as set forth below, neither the Selling Securityholder
nor any of its affiliates, officers, directors or principal
equity holders (5% or more) has held any position or office or
has had any other material relationship with the Issuer (or
its predecessors or affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Transfer Restricted
Securities listed above in Item (3) only as follows (if at
all): Such Transfer Restricted Securities may be sold from
time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters,
broker-dealers or agents. Such Transfer Restricted Securities
may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may
involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Transfer
Restricted Securities may be listed or quoted at the time of
sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or services or
in the over-the-counter market, or (iv) through the writing of
options. In connection with sales of the Transfer Restricted
Securities or otherwise, the Selling Securityholder may enter
into hedging transactions with broker-dealers, which may in
turn engage in short sales of the Transfer Restricted
Securities in the course of hedging the positions they assume.
The Selling Securityholder may also sell Transfer Restricted
Securities short and deliver Transfer Restricted Securities to
close out such short positions, or loan or pledge Transfer
Restricted Securities to broker-dealers that in turn may sell
such securities.
State any exceptions here:
22
Note: In no event may such method(s) of distribution take the form of
an underwritten offering of the Transfer Restricted Securities without the prior
agreement of the Issuer.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.
In the event that the Selling Securityholder transfers all or any
portion of the Transfer Restricted Securities listed in Item (3) above after the
date on which such information is provided to the Issuer, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer of
its rights and obligations under this Notice and Questionnaire and the
Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (6)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus. The Selling Securityholder understands that such
information will be relied upon by the Issuer in connection with the preparation
of the Shelf Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under
Section 3(a) of the Registration Rights Agreement to provide such information as
may be required by law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Issuer of any inaccuracies
or changes in the information provided herein which may occur subsequent to the
date hereof at any time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the Registration Rights Agreement
shall be made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:
(i) To the Issuer:
--------------------------
--------------------------
--------------------------
--------------------------
(ii) With a copy to:
--------------------------
--------------------------
--------------------------
--------------------------
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Issuer's counsel, the terms of this Notice
and
23
Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Issuer and the Selling Securityholder (with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above). This Agreement shall be governed in all respects by the laws of the
State of New York.
24
IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:--------------------------
--------------------------------------------------------------
Selling Securityholder
(Print/type full legal name of beneficial owner of Transfer
Restricted Securities)
By:_________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [ ] TO THE ISSUER'S COUNSEL AT:
--------------------------
--------------------------
--------------------------
--------------------------
25
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
RSL Communications, Ltd.
Attention: [ ]
Re: RSL Communications, Ltd.'s (the "Company") 7 1/2% Series A
Convertible Preferred Shares (the "Securities")
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Securities
pursuant to an effective Registration Statement on Form S-3 (File No. 333-____)
filed by the Issuer.
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been satisfied and that
the above-named beneficial owner of the Securities is named as a "Selling
Holder" in the Prospectus dated [ ], or in supplements thereto, and that the
aggregate principal amount of the Securities transferred are the Securities
listed in such Prospectus opposite such owner's name.
Dated:
Very truly yours,
------------------------
(Name)
By: ________________________
(Authorized Signature)
26