Exhibit 10.41
NEW SHAREHOLDERS AGREEMENT
THIS NEW SHAREHOLDERS AGREEMENT (this "Agreement"), dated September 9,
1996, is made by and among XXXXXXX X. XXXXXX ("Xxxxxx"), residing at 000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000, XXXXXXXXXX and XXXXXXXX XXXXXX,
both residing at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Xxxxxx
Daughters"), XXXXXXX X. XXXXXXX, XX. ("Xxxxxxx"), residing at 00 Xxxxxxx Xxxx,
Xxxxxx, XX 00000, RSL COMMUNICATIONS, LTD., a Bermuda corporation, as successor
in interest to RSL Communications Inc. ("Parent"), and RSL Communications PLC, a
United Kingdom corporation ("PLC") (Parent and PLC are collectively referred to
herein as "RSL"), with offices at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000 (individually a "Shareholder" and collectively the "Shareholders")
and INTERNATIONAL TELECOMMUNICATIONS GROUP, LTD. ("ITG"), a Delaware corporation
with offices at 000 XXX Xxxxx, Xxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxx
00000-0000.
W I T N E S S E T H:
WHEREAS, ITG, the Shareholders (other than RSL and the Xxxxxx Daughters)
and Incom (UK) Ltd. ("Incom") entered into a shareholders' agreement, dated the
first day of September, 1994 (the "Shareholders' Agreement"), as amended by the
Amendment to Shareholders' Agreement dated as of March 10, 1995 (the "First
Amendment"), and the Shareholders (other than the Xxxxxx Daughters) and ITG
entered into an Ancillary Shareholders' Agreement dated September 22, 1995 (the
"Ancillary Agreement"), with respect to, among other things, the transfer or
other disposition of the authorized and outstanding stock of ITG owned by the
Shareholders and Incom;
WHEREAS, Xxxxxx has, subject to Incom's exercise of its right of first
refusal pursuant to the Shareholders' Agreement, agreed to sell 106,985 shares
of ITG's common stock owned by him to RSL; and
WHEREAS, the parties hereto wish, as between and among them, to terminate
the Shareholders' Agreement, First Amendment and Ancillary Agreement and enter
into this Agreement, providing, among other things, for the granting of certain
exchange and other rights to Xxxxxx.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Termination of Shareholders' Agreement, First Amendment and Ancillary
Agreement. Except with respect to any rights Incom may have pursuant to (i) the
rights of first refusal under Section I of the Shareholders' Agreement in the
event of future sales by the Shareholders (other than shares of ITG capital
stock held by RSL, which are not subject to restrictions on transfer) of ITG
capital stock, (ii) its "tag along rights" pursuant to Section 5 of the First
Amendment, and except only as to the extent to which RSL's agreements contained
in Sections 2 and 5 of the First Amendment may benefit Incom, as between and
among themselves, the Shareholders hereby repeal, terminate and replace with
this Agreement, the Shareholders' Agreement, the First Amendment and the
Ancillary Agreement and the same shall have no force and effect as between and
among ITG and the Shareholders. In addition, the Shareholders hereby waive any
and all future preemptive rights which may otherwise be granted to any
Shareholders pursuant to Section IX of the Shareholders' Agreement. The
Shareholders hereby agree and confirm that that certain New Shareholders
Agreement, dated July 1, l996, attached as Exhibit B to that certain Promissory
Note in the principal amount of $5,000,000 made by ITG in favor of RSL
Communications PLC (as successor in interest to RSL Communications Limited)
dated July 1, 1996, is ab initio, of no force and effect.
2. Composition of the Board of Directors and Abolishment of Committees.
Pursuant to a letter to Xxxxxx sent by Xxx Lior, the Managing Director of Incom,
dated June 16, 1995 (the "Incom Letter") , Incom relinquished its rights to
elect two (2) members to the Board of Directors of ITG and provided that such
positions on the Board of Directors be eliminated unless the majority of the
Board of Directors decided otherwise. The Board of Directors has not decided
otherwise and, therefore, the two (2) Board member positions entitled to be
elected by Incom were eliminated. With such elimination of Board member
positions, and pursuant to the Shareholders' Agreement as amended by the First
Amendment, the Board of Directors is presently to be comprised of nine (9)
members, six entitled to be elected by Xxxxxx ("Xxxxxx Directors") and three (3)
entitled to be elected by RSL (the "RSL Directors") . The parties hereto agree
that of the Xxxxxx Directors, Xxxxxx shall nominate and elect five (5) nominees
designated by RSL and Xxxxxx shall nominate and elect the sixth Board member
that Xxxxxx is entitled to appoint pursuant to the Shareholders' Agreement as
amended by the First Amendment. The parties hereto, therefore, agree to vote all
their shares of capital stock of ITG for the election of a Board of Directors
consisting of nine (9) persons, of whom one person shall be nominated or
designated by Piluso and eight (8) persons shall be nominated or designated by
RSL. Furthermore, the parties acknowledge that pursuant to the Incom Letter,
Incom relinquished its rights to elect one (1) member to each of the committees
described in Paragraph 3 of the First Amendment and provided that such positions
be eliminated unless the majority of the Board of Directors decided otherwise.
The Board of Directors has not
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decided otherwise, and the Shareholders agree that they shall not form, or cause
to be formed, either of the committees discussed in such paragraph.
3. Xxxxxx, Piluso Daughters and Rebetti Anti-Dilution Rights. (a) In the
event (i) RSL or its Affiliates purchase additional shares of capital stock of
ITG directly from ITG or are issued additional shares of capital stock of ITG
directly by ITG and/or (ii) Incom or its Affiliates are issued additional shares
of capital stock as a result of Incom's anti-dilution rights triggered by such
purchase by or issuance to RSL or its Affiliates, then the Shareholders hereby
agree to amend the Certificate of Incorporation of ITG to provide for a class of
convertible common stock and to cause ITG to issue to the Xxxxxx Daughters and
Xxxxxx, in the aggregate, on a one-for-one exchange basis, convertible common
stock of ITG, convertible at the option of the holder into such number of shares
of common stock of ITG as shall, at all times until an initial public offering
of RSL (the "RSL IPO") shall occur, be equal to the following: 0.0532 times the
sum of the additional number of shares of capital stock of ITG so purchased by
or issued to RSL or its Affiliates and any additional shares of such capital
stock issued to Incom or its Affiliates as a result of such purchase or
issuance, such that the Xxxxxx Daughters and Xxxxxx, in the aggregate, together
maintain a five percent (5%) interest in ITG (not taking into account the 15,619
shares of ITG (the "Other Xxxxxx Shares") to be transferred by Xxxxxx to RSL
pursuant to that certain Agreement and Plan of Reorganization, dated as of
September 9, 1996 among PLC, Xxxxxx and Parent) after giving effect to any
shares so purchased or issued as provided in clauses (i) and (ii) above and
paragraph (b) below. Notwithstanding that the Incom Issuance (as defined below)
would not give rise to the rights set forth in the preceding sentence, the
Shareholders further agree that, immediately following the issuance of 3,954
non-voting shares of ITG to Incom (the "Incom Issuance") pursuant to that
certain Asset Purchase Agreement, dated as of August 12, 1996, between RSL COM
UK Limited and Incom, the Shareholders will cause ITG to issue to the Xxxxxx
Daughters and Xxxxxx, in the aggregate, such number of shares of common stock of
ITG as shall cause Xxxxxx and the Piluso Daughters together to own an aggregate
five percent of the capital stock of ITG at such time (not taking into account
the Other Xxxxxx Shares).
(b) In the event (i) RSL or its Affiliates purchase additional
shares of capital stock of ITG directly from ITG or are Issued additional shares
of capital stock of ITG directly by ITG and/or (ii) Incom or its Affiliates are
issued additional shares of capital stock as a result of Incom's anti-dilution
rights triggered by such purchase by or issuance to RSL or its Affiliates, then
the Shareholders hereby agree to amend the Certificate of Incorporation of ITG
to provide for a class of convertible common stock and to cause ITG to issue to
Rebetti, on a one-for-one exchange basis, convertible common stock of ITG,
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convertible at the option of the holder into such number of shares of common
stock of ITG as shall, at all times until an RSL IPO shall occur, be equal to
the following: 0.0l063 times the sum of the additional number of shares of
capital stock of ITG so purchased by or issued to RSL or its Affiliates and any
additional shares of such capital stock issued to Incom or its Affiliates as a
result of such Issuance or purchase, such that Rebetti maintains a one percent
(l%) interest in ITG after giving effect to any shares so purchased or issued as
provided in clauses (i) and (ii) above and paragraph (a) above. Notwithstanding
that the Incom Issuance would not give rise to the rights set forth in the
preceding sentence, the Shareholders further agree that, immediately following
the Incom Issuance, the Shareholders will cause ITG to issue to Rebetti such
number of shares of common stock of ITG as shall cause Rebetti to own an
aggregate one percent of the capital stock of ITG at such time.
(c) For purposes of this Section 3, "Affiliate" shall mean with
respect to any person, any other person, directly or indirectly controlling, or
controlled by, or under common control with, such person.
4. Xxxxxx and Xxxxxxx Exchange Rights. On the closing date of the RSL IPO,
RSL will grant to each of Xxxxxx, the Xxxxxx Daughters and Rebetti the right to
exchange all shares of common stock of ITG which Xxxxxx, the Xxxxxx Daughters or
Rebetti, as the case may be, then own for shares of RSL common stock equal to
the fair market value of Xxxxxx'x, the Xxxxxx Daughters' and/or Rebetti's ITG
common stock on that date. For purposes of this Section 4, shares of RSL common
stock shall be valued at the RSL IPO price to public per share and shares of ITG
common stock owned by Xxxxxx, the Xxxxxx Daughters and/or Rebetti shall be
valued in writing by the Managing Underwriter of the RSL IPO using its best
professional judgment as to the fair market value of such shares. The parties
agree to cooperate in good faith to take such actions as may be reasonable to
effect any exchange under this Section 4 on a tax-free basis to Xxxxxx, the
Xxxxxx Daughters and/or Rebetti as may be permitted by applicable law.
5. [intentionally omitted]
6. Tag-Along and Drag-Along Rights. (a) RSL agrees that it will not sell
or transfer its shares of ITG or any other securities of ITG that may now or
hereafter be held or owned by it to a third party other than an Affiliate who
agrees in writing to be bound by the terms hereof unless RSL first notifies
Xxxxxx, the Xxxxxx Daughters and Rebetti in writing (the "Notice") of its
intention to sell its ITG shares, as well as the proposed sale price per share.
Xxxxxx, the Xxxxxx Daughters and Rebetti shall each have the right, within ten
(10) days of the receipt of the Notice, to elect to require the third party to
purchase from them at such sale price per share specified in the Notice the same
proportion of ITG shares held by each of them as the proportion of ITG shares
owned by RSL that are proposed to be sold to the third party. The closing of
such sale shall occur at the same time as the closing of RSL's sale of shares of
ITG.
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b) RSL further agrees that in the event substantially all of its
assets are purchased by a third party and such assets purchased include RSL's
shares of ITG, or in the event all of RSL's stock is purchased by a third party,
RSL will ensure that such third party offers to purchase shares of ITG then held
by Xxxxxx, the Xxxxxx Daughters and/or Rebetti at the "Purchase Price per Share"
(defined in (c) below). Such Purchase Price per Share shall be payable by the
third party in the same form of consideration as is paid to RSL. The closing of
such sale shall occur at the same time as the closing of the purchase of
substantially all the assets of RSL.
(c) The purchase price per share of ITG stock shall be based on an
appraisal, made by a qualified independent appraiser mutually selected by
holders of the Series A Convertible Preferred Stock and Xxxxxx, of all of the
assets or stock sold by RSL to determine the relative value of the ITG shares
included in such sale, it being understood that such value will constitute a
fraction of the total purchase price paid to RSL. In the event such parties are
unable to mutually agree on an appraiser, each such party shall select one (1)
appraiser, and the two (2) appraisers so selected shall appoint a third
appraiser whose appraisal shall govern the determination of the Purchase Price
per Share. The appraised value of ITG shall be divided by the total number of
shares of ITG stock then outstanding to determine the per share purchase price
of the shares of ITG stock to be purchased by the third party (the "Purchase
Price per Share").
(d) Xxxxxx, the Xxxxxx Daughters and Rebetti agree that in the event
RSL receives an offer to purchase any of its shares of capital stock of ITG from
a third party other than an Affiliate of RSL (the "Third Party offer") , which
Third Party offer is accepted by RSL, they will, if requested by such third
party, sell to such third party the same proportion of the shares of capital
stock of ITG owned by each of them and so offered to be purchased as the
proportion of shares of capital stock of ITG owned by RSL that are proposed to
be purchased, at the same time and on the same terms and conditions as are
contained in the Third Party offer.
(e) For the purposes of this Section 6, "Affiliate" shall mean with
respect to any person, any other person, directly or indirectly controlling, or
controlled by, or under common control with, such person.
7. Entire Agreement; Conflict. This Agreement embodies the entire
agreement of the Stockholders with respect to their capital stock of ITG and the
subject matter hereof, and supersedes, as between and among the Stockholders,
and as between the Stockholders and ITG, any and all other or prior agreements
or arrangements, whether written or oral, which the Stockholders may have had
with respect to the subject matter hereof including,
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without limitation, the Shareholders' Agreement, the First Amendment and the
Ancillary Agreement, which agreements shall be null and void and of no further
force and effect as of the date hereof as between and among the Stockholders and
as between the Stockholders and ITG. In furtherance of the foregoing and not in
limitation thereof, whenever there shall exist an inconsistency between the
terms of this Agreement and the terms of the Shareholders' Agreement, the First
Amendment or the Ancillary Agreement, the terms of this Agreement shall prevail
and any right given to Xxxxxx in any of the Shareholders' Agreement, the First
Amendment or the Ancillary Agreement and not expressly set forth herein shall be
deemed terminated upon the execution of this Agreement.
8. Captions. The sections and other headings contained in this Agreement
are for reference purposes only and shall not affect the meaning, interpretation
or construction of this Agreement
9. Counterparts; Severability. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. To the extent any
provision or part of a provision of this Agreement is held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision or part thereof.
10. Successors and Assigns. This Agreement shall be binding on and inure
to the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns.
11. Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of New York without regard to whether New York would be the governing
law under that state's principles regarding choice of law.
12. Arbitration. Any dispute between the parties with respect to this
Agreement or any of the terms included herein and including the validity,
interpretation, breach, and remedies for breach, and the enforcement of this
Agreement, shall be resolved by an arbitrator in accordance with the following
provisions. The arbitration shall be before a single arbitrator (the
"Arbitrator") appointed upon the mutual agreement of the parties; provided,
however, that in the event the parties cannot reach such agreement, each of the
parties shall appoint an arbitrator and such arbitrators shall select the
Arbitrator. The Arbitrator will be bound by the substantive law of the State of
New York but will not be bound by the laws of evidence and procedure customary
in courts of law. The arbitration shall take place in New York. The execution of
this Agreement shall constitute an execution of an arbitration agreement as
well.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxx, Xx.
---------------------------
Xxxxxxx X. Xxxxxxx, Xx.
RSL COMMUNICATIONS, LTD.
By: /s/ Xxxxxx Xxxxxx
------------------
Name:
Title:
INTERNATIONAL TELECOMMUNICATIONS
GROUP, LTD.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name:
Title:
RSL COMMUNICATIONS PLC
By: /s/ Xxxxxx Xxxxxx
------------------
Name:
Title:
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx as custodian for
Xxxxxxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx as custodian for
Xxxxxxxx Xxxxxx
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