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EXHIBIT 4
PUT AGREEMENT
This PUT AGREEMENT ("Agreement") is made as of September 21, 1999
between and among LEON GENET, WALT ANDERSON, 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, Leon Genet, Walt Anderson and Revision each is a stockholder
of the Company; and
WHEREAS, Leon Genet, Walt Anderson and Revision each desires to enter
into certain arrangements pursuant to which Leon Genet and one or more of his
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 104,320 shares of Common Stock in the aggregate to Revision, and
Revision will be obligated to purchase such shares of Common Stock from Leon
Genet and his Designees (collectively, the "Put Holders"), on the terms and
subject to the conditions set forth herein.
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
sibling, lineal ancestor or lineal descendant of Leon Genet, or the spouse of a
sibling, lineal ancestor or lineal descendant of Leon Genet, and (iii) if a
corporation, limited liability company or partnership, is owned or controlled by
Leon Genet on the date hereof, and in each case has been designated by Leon
Genet to sell shares of Common Stock pursuant to the Put Option in amounts to be
determined by Leon Genet and set forth in the Exercise Notice.
(f) "Exercise Notice" shall have the meaning set forth in Section
2.1.
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(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(a).
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).
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 104,320 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"), Leon Genet, acting for himself and as agent for one or
more of his 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
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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 Swidler Berlin Shereff Friedman, 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
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to
the purchase by Revision of the Securities shall have expired or been
terminated; and
(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.
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; and
(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, 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.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Certain Representations and Warranties by Leon Genet.
(a) Leon Genet represents and warrants as of the date hereof and
again on the date of the 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 conditions 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 the
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) Leon Genet 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 and record owners of all right, title and interest in and to 104,320
shares of Common Stock.
4.2 Certain Representations and Warranties by Revision and Walt Anderson.
(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, 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
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first refusal (except as provided in Section 3.4 of the Put Agreement of even
date herewith among Walt Anderson, Warren Feldman, Solomon Feldman, Revision and
Total-Tel), and (ix) the net liquidation value of Revision's assets is in excess
of $20,000,000.
(c) Walt Anderson 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, (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 Leon Genet
and each of his 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 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 an Indemnified Party of any of
its representations, warranties, or covenants hereunder (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. 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
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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 shares of Common Stock owned by Leon Genet
and his 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) Walt Anderson 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 Leon Genet
and his 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 event that the net liquidation value of
Revision's assets declines below $20,000,000, Revision shall, within twenty-four
(24) hours, so notify Leon Genet in writing.
(e) On the day that is the earlier of (i) the date all of the shares
of Common Stock owned by Leon Genet are acquired by Revision, or (ii) the date
of expiration of the Exercise Period, Leon Genet shall submit a letter to the
Secretary of the Company and thereby resign from the Board of Directors of the
Company, such resignation to be effective at 5:00 p.m. on the first business day
following receipt thereof.
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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 Leon Genet:
30 Farmstead Road
Short Hills, NJ 07078
Attn: Leon Genet
(b) If to Revision or Walt Anderson:
c/o Gold & Appel Transfer, S.A.
1023 31st Street, 4th Floor
Washington, D.C. 20007
Attn: Walt Anderson
Facsimile No.: (202)736-5065
With a copy to:
Swidler Berlin Shereff Friedman, LLP
3000 K Street, N.W., Suite 300
Washington, D.C. 20007
Attn: Sean P. McGuinness
Facsimile No.: (202) 424-7643
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 Covington & Burling, 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
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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.
[END OF TEXT; SIGNATURE PAGE FOLLOWS]
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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/ Walt Anderson
-------------------------------
Name: Walt Anderson
Title: Manager
/s/ Walt Anderson
-------------------------------
Walt Anderson
/s/ Leon Genet
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Leon Genet
TOTAL-TEL USA COMMUNICATIONS, INC.
By: /s/ Dennis Spina
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Name: Dennis Spina
Title: President & Chief Executive
Officer
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