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EXHIBIT 1
PUT AGREEMENT
This PUT AGREEMENT ("Agreement") is made as of September 21, 1999
between and among XXXX XXXXXXXX, XXXXXX XXXXXXX, XXXXXXX XXXXXXX, REVISION LLC,
a Delaware limited liability company ("Revision"), and TOTAL-TEL USA
COMMUNICATIONS, INC., a New Jersey corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and
Revision each is a stockholder of the Company; and
WHEREAS, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxxxxxx, and
Revision each desires to enter into certain arrangements pursuant to which
Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and one or more of their respective Designees
(as defined below) will have the right (but not the obligation) to sell some or
all of their shares of Common Stock of the Company ("Common Stock") not to
exceed 1,103,817 shares of Common Stock in the aggregate to Revision, and
Revision will be obligated to purchase such shares of Common Stock from Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, and their respective Designees (collectively, the "Put
Holders"), on the terms and subject to the conditions set forth herein; and
WHEREAS, to induce Xxxxxx Xxxxxxx to enter into the Separation
Agreement (as defined below), the Company is willing to pay the related legal
fees of its counsel relating to their participation in the preparation and
negotiation of this Agreement.
NOW, THEREFORE, in consideration of the above mentioned premises,
the mutual covenants and agreements contained herein, and other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINED TERMS
1.1 Defined Terms. The capitalized terms contained and used in this
Agreement which are defined below shall have the respective meanings ascribed to
them as follows:
(a) "Claims" shall have the meaning set forth in Section 5.1.
(b) "Closing" shall have the meaning set forth in Section 3.1.
(c) "Common Stock" shall have the meaning set forth in the
recitals above.
(d) "Company" shall have the meaning set forth in the recitals
above.
(e) "Designee" shall mean a person or entity who (i) is the
record or beneficial owner of Common Stock on the date hereof; (ii) if an
individual, is (A) a sibling, lineal ancestor or lineal descendant of Xxxxxx
Xxxxxxx or Xxxxxxx Xxxxxxx, (B) the spouse of a sibling, lineal ancestor or
lineal descendant of Xxxxxx Xxxxxxx or Xxxxxxx Xxxxxxx, or (C) the sibling (or
such sibling's spouse) of the spouse of Xxxxxx Xxxxxxx or Xxxxxxx Xxxxxxx; and
(iii) if a
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corporation, limited liability company, trust or partnership, is owned or
controlled by Xxxxxx Xxxxxxx or Xxxxxxx Xxxxxxx on the date hereof, and in each
case has been designated by Xxxxxx Xxxxxxx or Xxxxxxx Xxxxxxx to sell shares of
Common Stock pursuant to the Put Option in amounts to be determined by Xxxxxx
Xxxxxxx or Xxxxxxx Xxxxxxx and set forth in the Exercise Notice.
(f) "Exercise Notice" shall have the meaning set forth in
Section 2.1.
(g) "Exercise Period" shall mean the period beginning on
December 11, 1999 and ending at 5:00 p.m. on February 10, 2000.
(h) "Indemnified Liabilities" shall have the meaning set forth in
Section 5.1.
(i) "Indemnified Parties" shall have the meaning set forth in
Section 5.1.
(j) "Loss Notice" shall have the meaning set forth in Section
5.1.
(k) "Put Holders" shall have the meaning set forth in the
recitals above.
(l) "Put Option" shall have the meaning set forth in Section 2.2.
(m) "Revision" shall have the meaning set forth in the recitals
above.
(n) "Securities" shall have the meaning set forth in Section 2.1.
(o) "Securities Act" shall have the meaning set forth in Section
4.2.
(p) "Separation Agreement" shall mean that certain Separation
Agreement dated as of the date hereof between Xxxxxx Xxxxxxx and the Company.
(q) "Settlement Agreement" shall mean that certain Settlement
Agreement among the Company, Revision and Xxxx Xxxxxxxx dated December 10, 1998.
1.2 Rules of Construction. The words "hereby", "herein", "hereunder,"
and words of similar import refer to this Agreement as a whole (including any
Exhibits and Schedules hereto) and not merely to the specific section, paragraph
or clause in which such word appears. The definitions given for terms in this
Agreement shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine, and neuter forms. The conjunction "or" shall
be understood in its inclusive sense (and/or).
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ARTICLE II
PUT OPTION
2.1 Grant of Put Option. On one occasion during the Exercise Period,
each of the Put Holders shall have the right (but not the obligation) to sell to
Revision, and Revision shall be obligated to purchase from each such Put Holder,
up to an aggregate of 1,103,817 shares of Common Stock (the "Securities") at a
purchase price of $16 per share.
2.2 Manner of Exercise. To exercise the put option set forth in
Section 2.1 (the "Put Option"), Xxxxxx Xxxxxxx, acting for himself and as agent
for Xxxxxxx Xxxxxxx and, if so designated, one or more of their Designees, shall
deliver written notice thereof (the "Exercise Notice") to Revision at any time
during the Exercise Period. Such Exercise Notice shall (a) list each Put Holder
who will sell shares of Common Stock, (b) specify the number of shares to be
sold by each such Put Holder, (c) provide the account information (name of bank,
address of bank, ABA number and bank account number) to which the purchase price
payment for such Put Holder should be wired, (d) state the aggregate purchase
price for the Securities subject to the Exercise Notice and provide a breakdown
of the amounts to be received by each Put Holder, and (e) specify a suggested
date and time for the Closing. The Put Option shall automatically expire (to the
extent then unexercised) without any further action of the parties, and no party
shall have any further rights or obligations under this Agreement except as
provided in Section 6.3, upon the earlier of (i) the exercise of the Put Option
or (ii) the expiration of the Exercise Period without the exercise by Put
Holders of their rights under the Put Option.
ARTICLE III
CLOSING
3.1 Closing of the Purchase. The closing of any purchase of
Securities pursuant to exercise of the Put Option (the "Closing") shall be held
at the offices of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, 3000 K Street, N.W.,
Washington, D.C., on the thirtieth business day after delivery of the Exercise
Notice, or on such later date as each of the conditions to Closing set forth in
Section 3.2 shall have been satisfied or waived by the party entitled to the
benefit thereof.
3.2 Conditions to Closing. It shall be a condition to the obligations
of the parties to purchase and sell Securities following the delivery of the
Exercise Notice that:
(a) Any waiting period (and any extension thereof) under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, applicable to
the purchase by Revision of the Securities shall have expired or been
terminated;
(b) The representations and warranties of the parties
contained in this Agreement shall have been true and complete when made, and
shall be true and complete on and as of the date of the Closing as though such
representations and warranties were made at and as of such date, except as
otherwise expressly contemplated herein; and
(c) Each of the parties to the Separation Agreement shall have
duly performed
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and complied in all material respects with all agreements, covenants and
conditions required to be performed or complied with by it under such Separation
Agreement.
3.3 Deliveries at Closing. At the Closing:
(a) Each Put Holder listed in the Exercise Notice shall
deliver to Revision one or more certificates representing the Securities duly
endorsed in blank or with stock power attached and signatures guaranteed;
(b) Each Put Holder listed in the Exercise Notice shall
deliver to Revision a signed statement, dated as of the date of the Closing,
pursuant to which such Put Holder represents and warrants to Revision that (i)
such Put Holder is the sole beneficial and record owner of all right, title, and
interest in and to the shares of Common Stock to be sold to Revision by the Put
Holder, (ii) such shares of Common Stock are free and clear of any security
interest, claims, liens, pledges, options, encumbrances, charges, agreements,
voting trusts, proxies, preemptive rights, or rights of first refusal or other
arrangements, restrictions, or legal or equitable limitations of any kind, and
(iii) upon the delivery of the stock certificates at the Closing, such Put
Holder will transfer good, valid, and marketable title to the shares of Common
Stock to Revision, free and clear of any security interests, claims, liens,
pledges, options, encumbrances, charges, agreements (other than those created by
the Settlement Agreement), voting trusts, proxies, preemptive rights or rights
of first refusal or other arrangements, restrictions or legal or equitable
limitations of any kind; and
(c) Revision simultaneously shall pay to each Put Holder
listed in the Exercise Notice the purchase price specified in such Exercise
Notice in immediately-available funds by wire transfer to the account or
accounts specified in the Exercise Notice.
3.4 Inability to Complete Purchase.
(a) If, at the time of the Closing, Revision is unable or
unwilling to pay any Put Holder the full purchase price for the Securities
subject to purchase from such Put Holder in accordance herewith for any reason
(other than as a consequence of the failure by such Put Holder to satisfy the
conditions precedent specified in Section 3.2), then, in addition to their other
remedies, (i) any Put Holder may elect to rescind the sale and retain the
Securities specified in the Exercise Notice; and (ii) Xxxx Xxxxxxxx and Revision
shall each grant Xxxxxx Xxxxxxx an irrevocable proxy to vote all shares of
Common Stock held or owned by Xxxx Xxxxxxxx and/or Revision or standing in the
name of Xxxx Xxxxxxxx and/or Revision (the "Proxy Stock"), which proxy shall
include, without limitation, the right to attend all meeting of stockholders of
the Company and then and there vote all such shares of Proxy Stock for the
transaction of any and all business that may come before such meetings and any
adjournments thereof, and the right to represent and to vote all shares of Proxy
Stock according to the number of votes that Xxxx Xxxxxxxx and/or Revision would
be entitled to cast if personally present.
(b) The proxy set forth in this Section 3.4 shall terminate
automatically upon the payment in full by Revision of the purchase price for the
Securities subject to purchase from each Put Holder in accordance herewith.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Certain Representations and Warranties by the Feldmans.
(a) Each of Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx represents and
warrants, severally and not jointly, as of the date hereof and again on the date
of such Closing, that (i) this Agreement has been duly executed and delivered by
him and constitutes his legal, valid, and binding obligation, enforceable
against him in accordance with its terms, (ii) subject to the satisfaction of
the condition set forth in Section 3.2(a), the execution, delivery, and
performance by him of this Agreement will not violate any order, writ,
injunction, decree, statute, rule, or regulation applicable to him, (iii) that
each Put Holder will be the sole beneficial and record owner of all right,
title, and interest in and to number of shares of Common Stock specified in any
Exercise Notice executed by such Put Holder, and (iv) upon the delivery of the
stock certificates at the Closing, each Put Holder will transfer good, valid,
and marketable title to such shares of Common Stock to Revision, free and clear
of any security interests, claims, liens, pledges, options, encumbrances,
charges, agreements, voting trusts, proxies, preemptive rights or rights of
first refusal, or other arrangements, restrictions, or legal or equitable
limitations of any kind.
(b) Xxxxxx Xxxxxxx represents and warrants, as of the date
hereof and again on the date of the Closing, that he and his Designees are the
sole beneficial or record owners of all right, title, and interest in and to
855,879 shares of Common Stock, including 120,222 shares of Common Stock
issuable upon exercise of vested but unexercised options to purchase shares of
Common Stock.
(c) Xxxxxxx Xxxxxxx represents and warrants, as of the date
hereof and again on the date of the Closing, that he and his Designees are the
sole beneficial or record owners of all right, title, and interest in and to
247,938 shares of Common Stock.
4.2 Certain Representations and Warranties by Revision and Xxxx
Xxxxxxxx.
(a) Revision represents and warrants, as of the date hereof
and again on the date of the Closing, that (i) the execution, delivery, and
performance by Revision of this Agreement has been duly authorized by all action
required by law, its certificate of formation, and operating agreement, (ii)
this Agreement has been duly executed and delivered by Revision and constitutes
a legal, valid, and binding obligation of Revision, enforceable against it in
accordance with its terms, (iii) the execution, delivery, and performance by
Revision of this Agreement will not conflict with or result in any breach of any
provision of the certificate of formation and operating agreement of Revision,
(iv) the execution, delivery, and performance by Revision of this Agreement will
not result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation, or acceleration) under, any of the terms,
conditions, or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement, or other instrument or obligation to which
Revision is a party or by which any of its assets or properties may be bound,
(v) subject to the satisfaction of the condition set forth in Section 3.2(a),
the execution, delivery, and performance by Revision of this Agreement will not
violate any order, writ, injunction,
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decree, statute, rule, or regulation applicable to Revision or any of its
properties or assets, (vi) upon exercise of the Put Option, Revision will
acquire the Securities for its own account for investment and not with a view
to, or for sale in connection with, any public distribution thereof in violation
of the Securities Act of 1933, as amended (the "Securities Act"), (vii) Revision
is an Accredited Investor within the meaning ascribed to such term under
Regulation D of the rules and regulations promulgated under the Securities Act,
(viii) all shares of Common Stock owned by Revision are owned free and clear of
any voting trusts, proxies, preemptive rights or rights of first refusal (except
as provided in Section 3.4), and (ix) the net liquidation value of Revision's
assets is in excess of $20,000,000.
(b) Xxxx Xxxxxxxx represents and warrants, as of the date
hereof and again on the date of the Closing, that (i) he has full authority to
execute and deliver this Agreement on his own behalf and on behalf of Revision,
(ii) this Agreement has been duly executed and delivered by him and constitutes
his legal, valid and binding obligation, enforceable against him in accordance
with its terms, and (iii) subject to the provisions of Section 3.2(a), the
execution, delivery, and performance by him of this Agreement will not violate
any order, writ, injunction, decree, statute, rule, or regulation applicable to
him.
ARTICLE V
COVENANTS AND UNDERTAKINGS
5.1 Indemnification.
(a) Revision shall indemnify, defend, and hold harmless Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx, and each of their respective Designees (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses,
liabilities, or judgments or amounts (including reasonable attorneys' fees) that
are suffered or incurred by them in connection with any claim, action, suit,
proceeding, or investigation resulting from the purchase of shares of Common
Stock by Revision pursuant to this Agreement and the other transactions
contemplated herein and in the Separation Agreement except to the extent that
the same shall result from the gross negligence or intentional misconduct of any
Indemnified Party or from the breach by any Indemnified Party of any of its
representations, warranties, or covenants hereunder (collectively, the
"Indemnified Liabilities").
(b) If an Indemnified Party desires to claim indemnification
pursuant to this Agreement, upon learning of any such claim, action, suit,
proceeding, or investigation (collectively, "Claims"), he shall as promptly as
practicable notify Revision by written notice (a "Loss Notice") (but the failure
so to notify Revision shall not relieve it from any liability which it may have
under this Agreement except to the extent such failure prejudices Revision).
Revision shall have the option (i) to conduct any proceedings or negotiations in
connection with any such Claims, (ii) to take all other steps to settle or
defend any such Claim (provided that Revision shall not settle any such Claim
without the written consent of the Indemnified Parties, which consent shall not
be unreasonably withheld), and (iii) to employ counsel chosen by the Indemnified
Parties (but reasonably acceptable to Revision) to contest any such Claim in the
name of the Indemnified Parties or otherwise. In the event that a settlement
entails only the payment of money damages and includes the full and final
release of all Claims against all Indemnified Parties, no consent of the
Indemnified Parties shall be required for such settlement.
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In the event that a settlement entails only the payment of money damages by an
Indemnified Party, no consent of the Indemnified Parties shall be required for
settlement; provided that at the request of an Indemnified Party within five
days of notice to such Indemnified Party of a proposed cash settlement, Revision
shall pay the amount of the cash settlement to the Indemnified Party which
payment shall fully and finally discharge all obligations of Revision hereunder
with respect to the Indemnified Liabilities. In any event, an Indemnified Party
shall be entitled to participate at his own expense and by his own counsel in
any proceedings relating to any Claim.
(c) Revision shall, within twenty (20) days of receipt of the
Loss Notice, notify the Indemnified Parties of its intention to assume the
defense of such Claim. If (i) Revision shall decline to assume the defense of
any such Claim, (ii) Revision shall fail to notify the Indemnified Parties
within twenty (20) days after receipt of the Loss Notice of Revision's election
to defend such Claim, or (iii) the Indemnified Parties shall have reasonably
concluded that there may be defenses available to them which are different from
or in addition to those available to Revision or a conflict exists between
Revision, on the one hand, and the Indemnified Parties, on the other hand (in
which case Revision shall not have the right to direct the defense of such
action on behalf of the Indemnified Parties), the Indemnified Parties shall
defend against such Claim. The indemnification under this Agreement shall only
be available for a Claim or proceeding against the Indemnified Parties to the
extent that indemnification from the Company under any applicable director and
officer indemnification policies provided by the Company is insufficient or
unavailable.
(d) The indemnification obligations of Revision hereunder
shall apply only to Indemnified Liabilities arising from Claims as to which
notice has been provided to Revision by the Indemnified Parties within sixty
(60) days of receipt of such notice by the Indemnified Parties.
5.2 Other Covenants and Undertakings.
(a) Following the exercise of the Put Option, each party will
use his or its commercially reasonable efforts to obtain satisfaction of the
conditions set forth in Section 3.2.
(b) In the period beginning on the date hereof and ending on
the earlier of (i) the date all of the Securities owned by Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxxx and their Designees are acquired by Revision, or (ii) the date
of expiration of the Exercise Period, Revision shall not sell, pledge, mortgage,
encumber, or otherwise dispose of any shares of the Company's Common Stock.
(c) Xxxx Xxxxxxxx shall cause Revision to perform and comply
in all material respects with all agreements, covenants, and conditions required
to be performed or complied with by it under this Agreement.
(d) At all times beginning on the date hereof and ending on
the earlier of (i) the date all of the shares of Common Stock owned by Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxx and their Designees are acquired by Revision, or (ii)
the date of expiration of the Exercise Period, Revision shall maintain the net
liquidation value of its assets at or above $20,000,000. In the
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event that the net liquidation value of Revision's assets declines below
$20,000,000, Revision shall, within twenty-four (24) hours, so notify Xxxxxx
Xxxxxxx in writing.
(e) The parties hereby terminate each and every existing
agreement between or among the parties hereto relating to the voting of shares
of the Company's Common Stock, including without limitation the agreement set
forth in Section 3(b) of that certain Stock Purchase Agreement dated December
10, 1998 among Xxxx Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxx and Revision (but
excluding the voting agreements contained in Section 3.4 hereof).
ARTICLE VI
GENERAL MATTERS
6.1 Notice. All communications provided for hereunder shall be
sent in writing and mailed by first class mail, return receipt requested, or
sent by overnight courier, or sent by facsimile transmission to the address
stated below or to such changed address as the addressee may have been given by
similar notice:
(a) If to Xxxxxx Xxxxxxx and/or Xxxxxxx Xxxxxxx:
000 Xxxx Xxxx Xxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
0000 Xxxxxxxx Xxxxxx
Xxx. 00X
Xxxx Xxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
(b) If to Revision or Xxxx Xxxxxxxx:
Xxxx Xxxxxxxx
c/o Gold & Xxxxx Tranfer, S.A.
0000 00xx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Facsimile No.: (000)000-0000
With a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. XxXxxxxxxx
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Facsimile No. (000) 000-0000
Any such notice shall be deemed received, if mailed, five days after mailing,
one day after sending by overnight courier, or upon confirmation of transmission
if sent by facsimile transmission.
6.2 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey, without giving effect to
its principles or rules of conflict of laws to the extent such principles or
rules would require or permit the application of the laws of another
jurisdiction.
6.3 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be borne by the party
incurring such expenses; provided, however, that the Company shall pay fees and
expenses of Xxxxxxxxx & Xxxxxxx, its counsel, incurred in connection with the
preparation of this Agreement.
6.4 No Third-Party Beneficiaries. Nothing in this Agreement shall be
construed as giving any person or entity, other than the parties hereto, the
Designees and their successors and permitted assigns, any right, remedy, or
claim under or in respect of this Agreement or any provision hereof, except as
expressly provided herein.
6.5 Successors and Assigns; Severability. This Agreement shall be
binding upon the respective successors, heirs, trustees and permitted assigns of
the parties hereto. This Agreement shall not be assignable or otherwise
transferable by any party without the prior written consent of the other parties
and any attempt to so assign or transfer this Agreement without such consent
shall be void and of no effect. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible.
6.6 Counterparts; Amendments; Entire Agreement, Etc. This Agreement
and any amendments hereto may be executed in one or more counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument. This Agreement may be changed, modified, amended or supplemented
only by written instrument signed by the parties hereto. No provision of this
Agreement may be waived orally, but only by a written instrument signed by the
party against whom enforcement of such waiver is sought. The headings in this
Agreement are inserted for convenience only and shall not constitute a part
hereof. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral
communications and prior writings with respect thereto.
6.7 Termination Upon Rejection of Separation Agreement.
Notwithstanding any provision hereof to the contrary, if Xxxxxx Xxxxxxx shall
revoke the Separation Agreement pursuant to Section 10(h) thereof, this
Agreement shall thereupon terminate and shall be void and of no force and
effect.
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IN WITNESS WHEREOF, this Put Agreement has been executed and
delivered by the parties hereto on the date first above written.
REVISION LLC
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Manager
/s/ Xxxx Xxxxxxxx
-------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx
TOTAL-TEL USA COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: President & Chief
Executive Officer
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