Exhibit 4.5
COLLATERAL PLEDGE AND SECURITY AGREEMENT
This COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "Pledge
Agreement") is made and entered into as of October 3, 1996 by RSL COMMUNICATIONS
PLC, a United Kingdom corporation (the "Pledgor"), having its principal office
at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, in favor of THE
CHASE MANHATTAN BANK, a banking corporation duly organized and existing under
the laws of the State of New York, having an office at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Global Trust Services Department, as trustee
(the "Trustee") for the holders (the "Holders") of the Notes (as defined herein)
issued by the Pledgor under the Indenture referred to below.
WITNESSETH
WHEREAS, the Pledgor, RSL Communications, Ltd., a Bermuda
corporation, as guarantor, and The Chase Manhattan Bank, as Trustee, have
entered into that certain indenture dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor is issuing on the date hereof
$300,000,000 in aggregate principal amount of 12 1/4% Senior Notes due 2006 (the
"Notes"); capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Indenture; and
WHEREAS, the Pledgor has agreed, pursuant to the Indenture, to (i)
purchase Government Securities (the "Pledged Securities") in an amount that will
be sufficient upon receipt of scheduled interest and principal payments in
respect thereof, in the opinion of a nationally recognized firm of independent
accountants selected by the Pledgor and delivered to the Trustee, to provide for
payment of the first six scheduled interest payments due on the Notes and (ii)
place the Pledged Securities in an account held by the Trustee for the benefit
of Holders of the Notes; and
WHEREAS, upon the purchase of the Pledged Securities, the Pledgor
will be the beneficial owner of the Pledged Securities; and
WHEREAS, to secure the obligation of the Pledgor under the Indenture
and the Notes to pay in full the first six scheduled interest payments on the
Notes and to secure repayment of the Notes in the event that the Notes become
due and payable prior to such time as the first six scheduled interest payments
thereon shall have been paid in full (the "Obligations"), the Pledgor has agreed
to (i) pledge to the Trustee for its benefit and the ratable benefit of the
Holders of the Notes, a security interest in the Pledged Securities, all
book-entry interests therein and the Pledge Account and any and all proceeds of
the foregoing (as defined herein) and (ii) execute and deliver this Pledge
Agreement.
2
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein
contained. and in order to induce the Holders of the Notes to purchase the
Notes, the Pledgor hereby agrees with the Trustee, for the benefit of the
Trustee and for the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Trustee for its benefit and for the ratable benefit of the
Holders of the Notes, and grants to the Trustee for its benefit and for the
ratable benefit of the Holders of the Notes, a first priority security interest
in and to (a) all of Pledgor's right, title and interest in the Pledged
Securities and the Pledge Account, (b) all book-entry interests in the Pledged
Securities and any certificates or other evidence of ownership representing the
Pledged Securities and the Pledge Account, and (c) except as otherwise provided
herein, all products and proceeds of any of the Pledged Securities and the
Pledge Account, including, without limitation, all dividends, interest,
principal payments, cash, options, warrants, rights, instruments, subscriptions
and other property or proceeds from time to time received, receivable or
otherwise distributed or distributable in respect of or in exchange for any or
all of the Pledged Securities or the Pledge Account (collectively, the
"Collateral").
SECTION 2. Security for Obligation. This Pledge Agreement secures
the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of all the Obligations.
SECTION 3. Delivery of Collateral; Pledge Account; Interest. (a) All
certificates or instruments, if any, representing or evidencing the Collateral
shall be delivered to and held by or on behalf of the Trustee pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form
reasonably satisfactory to the Trustee, and all book-entry interests in the
Pledged Securities shall be transferred to the Pledge Account through the
individual account of the Trustee at the Federal Reserve Bank of New York. The
Trustee in its individual capacity shall confirm in writing (such confirmation
to be in the form of Exhibit A hereto) to the Pledgor and to the Trustee in its
capacity as Trustee hereunder that it is holding the book-entry Pledged
Securities for the benefit of the Trustee in its capacity as Trustee hereunder
and the ratable benefit of the Holders of Notes and the Trustee shall duly
record in its books and records that the Pledgor has pledged and granted a
security interest in such book-entry interests in the Pledged Securities and in
the Pledge Account to the Trustee on behalf of itself and the holders of the
Notes.
(b) Concurrently with the execution and delivery hereof and prior to
the delivery of any certificates or instruments representing or evidencing
the Collateral or transfer of book-entry interests in the Pledged
Securities as provided in subsection (a) of
3
this Section 3, the Trustee shall establish an account segregated from all
other custodial or collateral accounts for the deposit of the Pledged
Securities (the "Pledge Account") at its office at 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. Subject to the other terms and conditions of
this Pledge Agreement, all funds or other property accepted by the Trustee
pursuant to this Pledge Agreement shall be held in the Pledge Account for
the benefit of the Trustee and for the ratable benefit of the Holders of
the Notes and segregated from all other funds or other property otherwise
held by the Trustee and all book-entry interests in the Pledged Securities
shall be transferred to and held in the Pledge Account for the benefit of
the Trustee and for the ratable benefit of the Holders of the Notes.
(c) All interest earned on any Collateral shall be retained in the
Pledge Account for the benefit of the Pledgor, pending disbursement
pursuant to the terms hereof.
SECTION 4. Disbursements. (a) Up to three (3) Business Days prior to
the due date of any of the first six scheduled interest payments on the Notes,
the Pledgor may, pursuant to an Issuer Order, direct the Trustee, in writing, to
release from the Pledge Account proceeds sufficient to provide for payment in
full of such interest then due on the Notes. Upon receipt of an Issuer Order,
the Trustee will take any action necessary to provide for the payment of the
interest on the Notes in accordance with the payment provisions of the Indenture
to the Holders of the Notes from (and to the extent of) proceeds of the Pledged
Securities in the Pledge Account. Nothing in this Section 4 shall affect the
Trustee's rights to apply any Collateral in satisfaction of the Obligations at
any time upon acceleration of the Notes.
(b) If the Pledgor makes any interest payment or portion of an
interest payment for which the Pledged Securities are collateral from a
source of funds other than the Pledge Account ("Pledgor Funds"), the
Pledgor may, after payment in full of such interest payment or portion
thereof from proceeds of the Pledged Securities or such Pledgor Funds or
both, direct the Trustee to release to the Pledgor or to another party at
the direction of the Pledgor (the "Pledgor's Designee") proceeds from the
Pledge Account in an amount less than or equal to the amount of Pledgor
Funds applied to such interest payment. Upon receipt of an Issuer Order by
the Trustee and any other documentation reasonably satisfactory to the
Trustee to substantiate such use of Pledgor Funds by the Pledgor
(including the certificate described in the following sentence), the
Trustee will pay over to the Pledgor or the Pledgor's Designee, as the
case may be, the requested amount from proceeds in the Pledge Account.
Concurrently with any release of funds to the Pledgor pursuant to this
Section 4(b), the Pledgor will deliver to the Trustee an Officers'
Certificate stating that such release has been duly authorized by the
Pledgor and will not contravene any provision of applicable law or the
Memorandum of Association or Articles of Association of the Pledgor or any
material agreement or other material instrument binding upon the Pledgor
or any of its subsidiaries or any judgment,
4
order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries.
(c) If at any time the principal of and interest on the Pledged
Securities held in the Pledge Account exceeds 100% of the amount
sufficient, in the written opinion of a nationally recognized firm of
independent accountants selected by the Pledgor and delivered to the
Trustee, to provide for payment in full of the first six scheduled
interest payments due on the Notes (or, in the event one or more interest
payments have been made thereon, an amount sufficient to provide for the
payment in full of any and all interest payments on the Notes then
remaining, up to and including the sixth scheduled interest payment), the
Pledgor may direct the Trustee, in writing, to release any such overfunded
amount to the Pledgor or to such other party as the Pledgor may direct.
Upon receipt of an Issuer Order and any other documentation reasonably
satisfactory to the Trustee to substantiate such excess (including such
written opinion of a nationally recognized accounting firm), the Trustee
shall pay over to the Pledgor or the Person designated by the Pledgor, as
the case may be, any such overfunded amount.
(d) Upon payment in full of the first six scheduled interest
payments on the Notes in a timely manner and provided that no principal
amount of the Notes has become or is due and payable at such time, the
security interest in the Collateral evidenced by this Pledge Agreement
will automatically and indefeasibly terminate and be of no further force
and effect. Furthermore, upon the release of any Collateral from the
Pledge Account in accordance with the terms of this Pledge Agreement,
whether upon release of Collateral to Holders as payment of interest or
otherwise, the security interest evidenced by this Pledge Agreement in
such released Collateral will automatically and indefeasibly terminate and
be of no further force and effect.
(e) The Pledgor covenants to give the Trustee at least three (3)
Business Days' notice (by Issuer Order) as to whether payment of interest
will be made pursuant to Section 4(a) or 4(b) and as to the respective
amounts of interest that will be paid pursuant to Section 4(a) or 4(b).
The Pledgor also covenants to give the Trustee written notice as to which
Pledged Securities, if any, shall be liquidated in order to make such
interest payment. If no such notice is given, the Trustee will act
pursuant to Section 4(a) as if it had received an Issuer Order pursuant
thereto for the payment in full of the interest then due.
(f) The Trustee shall not be required to liquidate any Pledged
Security in order to make any scheduled payment of interest or any release
hereunder unless instructed to do so by Issuer Order.
5
SECTION 5. Representations and Warranties. The Pledgor hereby
represents and warrants that:
(a) The execution and delivery by the Pledgor of, and the
performance by the Pledgor of its obligations under, this Pledge Agreement
will not contravene any provision of applicable law or the Memorandum of
Association or Articles of Association of the Pledgor or any material
agreement or other material instrument binding upon the Pledgor or any of
its subsidiaries or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Pledgor or any of its
subsidiaries, or result in the creation or imposition of any Lien on any
assets of the Pledgor, except for the security interest granted under this
Pledge Agreement; no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for (i)
the performance by the Pledgor of its obligations under this Pledge
Agreement or (ii) the pledge by the Pledgor of the Collateral pursuant to
this Pledge Agreement.
(b) The Pledgor is the beneficial owner of the Collateral, free and
clear of any Lien or claims of any person or entity (except for the
security interests granted under this Pledge Agreement). No financing
statement covering the Pledged Securities is on file in any public office
other than the financing statements, if any, filed pursuant to this Pledge
Agreement and forms 395 or 397 filed with the Registrar of Companies in
the United Kingdom.
(c) This Pledge Agreement has been duly authorized, validly executed
and delivered by the Pledgor and (assuming the due authorization and valid
execution and delivery of this Pledge Agreement by the Trustee and
enforceability of the Pledge Agreement against the Trustee in accordance
with its terms) constitutes a valid and binding agreement of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as
(i) the enforceability hereof may be limited by bankruptcy, insolvency.
fraudulent conveyance, preference, reorganization, moratorium or similar
laws now or hereafter in effect relating to or affecting creditors' rights
or remedies generally, (ii) the availability of equitable remedies may be
limited by equitable principles of general applicability and the
discretion of the court before which any proceeding therefor may be
brought, (iii) rights to indemnification hereunder may be limited by U.S.
federal and state securities laws and public policy considerations and
(iv) the waiver of rights and defenses contained in Section 12(b),
Section 15.11 and Section 15.16 hereof may be limited by applicable law.
(d) Upon the delivery to the Trustee of the certificates or
instruments, if any, representing or evidencing the Pledged Securities,
the filing of financing statements, if any, required by the Uniform
Commercial Code (the "UCC") in the appropriate offices in the State of New
York and the filing of form 395 or 397 with the Registrar of
6
Companies in the United Kingdom, and upon the transfer by the Trustee in
its individual capacity and the due recording in the books and records of
the Trustee in its capacity as trustee hereunder of interests in the
Pledged Securities to and in the name of the Trustee for its benefit and
the ratable benefit of the Holders of the Notes and the due recording by
the Trustee in its books and records that the Pledgor has pledged and
granted a security interest in such interests in the Pledged Securities to
the Trustee on behalf of itself and the holders of the Notes and receipt
by the Trustee and the Pledgor of written confirmation thereof in the form
of Exhibit A hereto, the pledge of and grant of a security interest in the
Collateral securing the payment of the Obligations for the benefit of the
Trustee and the Holders of the Notes will constitute a first priority
perfected security interest in such Collateral, enforceable as such
against all creditors of the Pledgor and any persons purporting to
purchase any of the Collateral from the Pledgor.
(e) There are no legal or governmental proceedings pending or, to
the best of the Pledgor's knowledge, threatened to which the Pledgor or
any of its subsidiaries is a party or to which any of the properties of
the Pledgor or any such subsidiary is subject that would materially and
adversely affect the power or ability of the Pledgor to perform its
obligations under this Pledge Agreement or to consummate the transactions
contemplated hereby.
(f) The pledge of the Collateral pursuant to this Pledge Agreement
is not prohibited by any applicable law or governmental regulation,
release, interpretation or opinion of the Board of Governors of the
Federal Reserve System or other regulatory agency (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System).
(g) No Event of Default exists.
SECTION 6. Further Assurances. The Pledgor will, promptly upon
request by the Trustee, execute and deliver or cause to be executed and
delivered, or use its reasonable best efforts to procure, all stock powers,
proxies, assignments, instruments and other documents, all in form and substance
reasonably satisfactory to the Trustee, deliver any instruments to the Trustee
and take any other actions that are necessary or, in the reasonable opinion of
the Trustee, desirable to perfect, continue the perfection of, or protect the
first priority of the Trustee's security interest in and to the Collateral, to
protect the Collateral against the rights, claims, or interests of third persons
or to effect the purposes of this Pledge Agreement. The Pledgor also hereby
authorizes the Trustee to file any financing or continuation statements in the
United States or any form with the Registrar of Companies in the United Kingdom
with respect to the Collateral without the signature of the Pledgor (to the
extent permitted by applicable law). The Trustee shall provide the Pledgor, at
the Pledgor's expense, with a copy of any such filing. The Pledgor will promptly
pay all reasonable costs incurred in connection with any of the foregoing within
45 days of receipt of an invoice therefor. The Pledgor also agrees, whether
7
or not requested by the Trustee, to take all actions that are necessary to
perfect or continue the perfection of, or to protect the first priority of, the
Trustee's security interest in and to the Collateral, including the filing of
all necessary financing and continuation statements or forms with the Registrar
of Companies in the United Kingdom, and to protect the Collateral against the
rights, claims or interests of third persons. The Trustee shall have no duty to
perform or monitor any of the foregoing, except to the extent that the failure
to do so would constitute bad faith or negligent or willful misconduct by the
Trustee. Upon the written direction of the Pledgor and at the Pledgor's
expense, the Trustee agrees to take all actions that are necessary or reasonably
desirable to release the security interest of the Trustee in the Collateral, or
any portion thereof, pursuant to the terms hereof.
SECTION 7. Covenants. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes from and after the date of this Pledge
Agreement until the earlier of payment in full in cash of (x) each of the first
six scheduled interest payments due on the Notes under the terms of the
Indenture or (y) all obligations due and owing under the Indenture and the Notes
in the event such obligations become due and payable prior to the payment of the
first six scheduled interest payments on the Notes:
(a) that it will not (i) sell or otherwise dispose of, or transfer,
or grant any option or warrant with respect to, any of the Collateral or
(ii) create or permit to exist any Lien upon or with respect to any of the
Collateral (except for the Lien created pursuant to this Pledge Agreement)
and at all times will be the sole beneficial owner of the Collateral; or
(b) that it will not (i) enter into any agreement or understanding
that purports to or may restrict or inhibit the Trustee's rights or
remedies hereunder, including, without limitation, the Trustee's right to
sell or otherwise dispose of the Collateral or (ii) fail to pay or
discharge any tax, assessment or levy of any nature with respect to the
Collateral not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment with respect to the
Collateral.
SECTION 8. Power of Attorney. In addition to all of the powers
granted to the Trustee pursuant to the Indenture, the Pledgor hereby appoints
and constitutes the Trustee as the Pledgor's attorney-in-fact (with full power
of substitution) to exercise to the fullest extent permitted by law all of the
following powers upon and at any time after the occurrence and during the
continuance of an Event of Default; (a) collection of proceeds of any
Collateral; (b) conveyance of any item of Collateral to any purchaser thereof;
(c) giving of any notices or recording of any Liens under Section 6 hereof: (d)
making of any payments or taking any acts under Section 9 hereof and (e) paying
or discharging taxes or Liens levied or placed upon the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be
determined by the Trustee in its sole reasonable discretion, and such payments
made by the Trustee to become part of the Obligations of the Pledgor to the
Trustee, due and payable
8
immediately upon demand. The Trustee's authority under this Section 8 shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
Pledgor's name on all financing statements or forms to be filed with the
Registrar of Companies in the United Kingdom (to the extent permitted by
applicable law) or any other documents deemed necessary or appropriate by the
Trustee to preserve, protect or perfect the security interest in the Collateral
and to file the same, prepare, file and sign the Pledgor's name on any notice of
Lien, and to take any other actions arising from or incident to the powers
granted to the Trustee in this Pledge Agreement. This power of attorney is
coupled with an interest and is irrevocable by the Pledgor.
SECTION 9. Trustee May Perform. If the Pledgor fails to perform any
agreement contained herein, the Trustee may itself perform, or cause the
performance of, such agreement, and the reasonable fees and expenses of the
Trustee incurred in connection therewith shall be payable by the Pledgor under
Section 13 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Trustee hereunder are being granted in order to preserve
and protect the Trustee's and the Holders' of the Notes security interest in and
to the Collateral granted hereby and shall not be interpreted to, and shall not
impose any duties on the Trustee in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided by
applicable law, the Trustee shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Trustee
accords similar property in similar situations, it being understood that, except
as expressly set forth herein, the Trustee shall not have any responsibility for
(a) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities or other matters relative to any Collateral, whether or not the
Trustee has or is deemed to have knowledge of such matters, (b) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral or (c) investing or reinvesting any of the Collateral.
SECTION 11. Indemnify. The Pledgor shall indemnify, hold harmless
and defend the Trustee and its directors, officers, agents and employees, from
and against any and all claims, actions, obligations, liabilities and expenses,
including reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees and expenses and damages arising from the Trustee's
performance under this Pledge Agreement, except to the extent that such claim,
action, obligation, liability or expense is directly attributable to the bad
faith, gross negligence or wilful misconduct of such indemnified person.
9
SECTION 12. Remedies Upon Event of Default. If any Event of Default
under the Indenture or default hereunder (any such Event of Default or default
being referred to in this Pledge Agreement as an "Event of Default") shall have
occurred and be continuing:
(a) The Trustee and the Holders of the Notes shall have, in addition
to all other rights given by law or by this Pledge Agreement or the
Indenture, all of the rights and remedies with respect to the Collateral
of a secured party under the UCC in effect in the State of New York at
that time. In addition, with respect to any Collateral that shall then be
in or shall thereafter come into the possession or custody of the Trustee,
the Trustee may sell or cause the same to be sold at any broker's board or
at public or private sale, in one or more sales or lots, at such price or
prices as the Trustee may deem best, for cash or on credit or for future
delivery, without assumption of any credit risk. The purchaser of any or
all Collateral so sold shall thereafter hold the same absolutely, free
from any claim, encumbrance or right of any kind whatsoever created by or
through the Pledgor. Unless any of the Collateral is likely, in the
reasonable judgment of the Trustee, to decline speedily in value, the
Trustee will give the Pledgor reasonable notice of the time and place of
any public sale thereof or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to the Pledgor as provided in
Section 15.1 hereof at least ten (10) days before the time of the sale or
disposition. The Trustee or any Holder of Notes may, in its own name or in
the name of a designee or nominee, buy any of the Collateral at any public
sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses
and disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral.
(b) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make
such sale or sales of all or any portion of the Collateral pursuant to
this Section 12 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach
of any of the covenants contained in this Section 12 will cause
irreparable injury to the Trustee and the Holders of the Notes, that the
Trustee and the Holders of the Notes have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section 12 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred.
10
SECTION 13. Expenses. The Pledgor will upon written demand or
invoice pay to the Trustee the amount of any and all reasonable expenses,
including, without limitation, the reasonable fees, expenses and disbursements
of its counsel, experts and agents retained by the Trustee, that the Trustee may
incur in connection with (a) the review, negotiation and administration of this
Pledge Agreement, (b) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee and the Holders of the Notes
hereunder or (d) the failure by the Pledgor to perform or observe any of the
provisions hereof. The lien in favor of the Trustee created by Section 7.07 of
the Indenture shall in addition to securing the Pledgor's payment obligations
under such Section 7.07 secure the Pledgor's payment obligations under Section
11 and 13 hereof.
SECTION 14. Security Interest Absolute. All rights of the Trustee
and the Holders of the Notes and security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of. all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens
on any other collateral for all or any of the Obligations; or
(d) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Obligations or of this Pledge
Agreement.
SECTION 15. Miscellaneous Provisions.
Section 15.1. Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner, and delivered to each of the parties hereto at their respective
addresses, as set forth or provided for in Section 12.02 of the Indenture.
Section 15.2. No Adverse Interpretation of Other Agreements. This
Pledge Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement may be used to interpret this Pledge Agreement.
11
Section 15 3. Severability. The provisions of this Pledge Agreement
are severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.
Section 15.4. Headings. The headings in this Pledge Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 15.5. Counterpart Originals. This Pledge Agreement may be
signed in two or more counterparts, each of which shall be deemed an original,
but all of which shall together constitute one and the same agreement.
Section 15.6. Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Notes, any benefit
or any legal or equitable right, remedy or claim under this Pledge Agreement.
Section 15.7. Amendments, Waivers and Consents. Any amendment or
waiver of any provision of this Pledge Agreement by the parties hereto and any
consent to any departure by the Pledgor from any provision of this Pledge
Agreement shall be effective only if made or duly given in compliance with all
of the terms and provisions of the Indenture, and neither the Trustee nor any
Holder of Notes shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Trustee or any Holder of Notes to exercise, or
delay in exercising, any right, power or privilege hereunder shall not preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Trustee or any Holder of Notes of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Trustee or such Holder of Notes would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
Section 15.8. Interpretation of Agreement. All terms not defined
herein or in the Indenture shall have the meaning set forth in the applicable
UCC, except where the context otherwise requires. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Pledge Agreement shall not be relevant to determine the meaning of this Pledge
Agreement even though
12
the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
Section 15.9. Continuing Security Interest; Termination. (a) This
Pledge Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in the Indenture or in this
Pledge Agreement, remain in full force and effect until the earlier of payment
in full in cash of (i) each of the first six scheduled interest payments due on
the Notes under the terms of the Indenture or (ii) all obligations due and owing
under the Indenture and the Notes in the event such obligations become payable
prior to the payment of the first six scheduled interest payments on the Notes.
This Pledge Agreement shall be binding upon the Pledgor, its transferees,
successors and assigns, and shall inure, together with the rights and remedies
of the Trustee hereunder, to the benefit of the Trustee, the Holders of the
Notes and their respective successors, transferees and assigns.
(b) Subject to the provisions of Section 15.10 hereof, this Pledge
Agreement shall terminate upon the earlier of payment in full in cash of
(i) each of the first six scheduled interest payments due on the Notes
under the terms of the Indenture or (ii) all obligations due and owing
under the Indenture and the Notes in the event such obligations become
payable prior to the payment of the first six scheduled interest payments
on the Notes. At such time, the Trustee shall, pursuant to an Issuer
Order, reassign and redeliver to the Pledgor all of the Collateral
hereunder that has not been sold, disposed of, retained or applied by the
Trustee in accordance with the terms of this Pledge Agreement and the
Indenture. Such reassignment and redelivery shall be without warranty by
or recourse to the Trustee, except as to the absence of any prior
assignments by the Trustee of its interest in the Collateral, and shall be
at the reasonable expense of the Pledgor.
Section 15.10. Survival Provisions. All representations, warranties
and covenants of the Pledgor contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the termination
of this Pledge Agreement. The obligations of the Pledgor under Sections 11 and
13 hereof shall survive the termination of this Agreement.
Section 15.11. Waivers. The Pledgor waives presentment and demand
for payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
13
Section 15.12. Authority of the Trustee. (a) The Trustee shall have
and be entitled to exercise all powers hereunder that are specifically granted
to the Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Neither the Trustee nor any director, officer,
employee, attorney or agent of the Trustee shall be liable to the Pledgor for
any action taken or omitted to be taken by it hereunder, except for its own bad
faith, gross negligence or wilful misconduct, and the Trustee shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Trustee and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document believed by it or them to be genuine and
correct and to have been signed or sent by the proper person or persons.
(b) The Pledgor acknowledges that the rights and responsibilities of
the Trustee under this Pledge Agreement with respect to any action taken
by the Trustee or the exercise or non-exercise by the Trustee of any
option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as
between the Trustee and the Holders of the Notes, be governed by the
Indenture and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Trustee and the Pledgor,
the Trustee shall be conclusively presumed to be acting as agent for the
Holders of the Notes with full and valid authority so to act or refrain
from acting, and the Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
Section 15.13. Limitation by Law. All rights, remedies and powers
provided herein may be exercised only to the extent that they will not render
this Pledge Agreement not entitled to be recorded, registered or filed under
provisions of any applicable law.
Section 15.14. Final Expression. This Pledge Agreement, together
with any other agreement executed in connection herewith, is intended by the
parties as a final expression of this Pledge Agreement and is intended as a
complete and exclusive statement of the terms and conditions thereof.
Section 15.15. Rights of Holders of the Notes. No Holder of Notes
shall have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Section 6.06 of the Indenture;
provided that nothing in this subsection shall limit any rights granted to the
Trustee under the Notes or the Indenture.
Section 15.16. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; WAIVER OF DAMAGES. (a) THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY
AND INTERPRETED UNDER THE LAWS OF THE STATE
14
OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED WITH. RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR, THE TRUSTEE AND
THE HOLDERS OF THE NOTES IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
(b) THE PLEDGOR HAS APPOINTED RSL COMMUNICATIONS N. AMERICA, INC.,
000 XXXXX XXXXXX, XXXXX 0000, XXX XXXX, XXX XXXX 00000 AS ITS AGENT FOR SERVICE
OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND
FOR ACTIONS BROUGHT UNDER U.S. FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY
FEDERAL OR STATE COURT LOCATED IN THE CITY OF NEW YORK AND AGREES TO SUBMIT TO
THE JURISDICTION OF ANY SUCH COURT.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR ITS
PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND
HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR ITS PROPERTY, AS THE
CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE PLEDGOR
AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS IN ANY
PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH
PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE PLEDGOR WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN THE CITY OF NEW YORK
ONCE THE TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
(d) THE PLEDGOR AND THE TRUSTEE EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR
OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS PLEDGE AGREEMENT.
INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
15
(e) THE PLEDGOR AGREES THAT NEITHER THE TRUSTEE NOR ANY HOLDER OF
NOTES SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER ARISING IN TORT, CONTRACT
OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION WITH, ARISING OUT
OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP
ESTABLISHED BY THIS PLEDGE AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION THEREWITH, UNLESS SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON
THE PART OF THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY BE,
CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS (1) ADMITTED
BY THE TRUSTEE IN WRITING, (2) AGREED UPON BY THE PARTIES HERETO IN WRITING OR
(3) SET FORTH IN A JUDGMENT OF A COURT WHICH IS NOT SUBJECT TO APPEAL OR WITH
RESPECT TO WHICH THE TIME FOR FILING AN APPEAL HAS EXPIRED.
(f) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT AS
OTHERWISE PROVIDED IN THIS PLEDGE AGREEMENT, THE PLEDGOR WAIVES ALL RIGHTS OF
NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY
HOLDER OF NOTES OF ITS RIGHTS DURING THE CONTINUANCE OF ALL EVENTS OF DEFAULT TO
REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER OF
NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION, THIS PLEDGE AGREEMENT OR ANY OTHER
AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR ON THE ONE HAND AND THE TRUSTEE AND/OR
THE HOLDERS OF THE NOTES ON THE OTHER HAND.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Pledgor and the Trustee have each caused
this Pledge Agreement to be duly executed and delivered as of the date first
above written.
Pledgor:
RSL COMMUNICATIONS PLC
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title:
Trustee:
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice Pesident
EXHIBIT A TO THE
COLLATERAL PLEDGE
AND SECURITY AGREEMENT
RSL Communications PLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
The Chase Manhattan Bank,
as Trustee
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Global Trust Services Department
Ladies and Gentlemen:
Reference is made to the Indenture dated as of October 3, 1996
between RSL Communications PLC, as issuer (the "Issuer"), RSL Communications,
Ltd., as guarantor, and The Chase Manhattan Bank, as trustee thereunder (the
"Trustee") relating to the 12 1/4% Senior Notes due 2006 of the Issuer (the
"Notes") and the Collateral Pledge and Security Agreement dated as of October 3,
1996 (the "Pledge Agreement") between the Issuer and the Trustee, for the
benefit of the Trustee and the ratable benefit of the holders of the Notes.
We hereby confirm that we are holding the Pledged Securities (as
defined in the Pledge Agreement) in account no. C24179A (the "Account") at our
office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000-0000, for the benefit
of the Trustee and the ratable benefit of the holders of the Notes as provided
in the Pledge Agreement and that we have indicated the same in our books and
records relating to the Pledged Securities and the Account.
Very truly yours,
THE CHASE MANHATTAN BANK,
in its individual capacity
By /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
