-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VmwFeOU6N154ER/ap+7wAyuFdLVkIZJNrV4vVyncr8t2dDKHdoFKe4vFuJanlYp2 ox5UIH2HPaAd4+ihT1owdQ== 0001015426-98-000021.txt : 19981229 0001015426-98-000021.hdr.sgml : 19981229 ACCESSION NUMBER: 0001015426-98-000021 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19981228 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TOTAL TEL USA COMMUNICATIONS INC CENTRAL INDEX KEY: 0000034497 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 221656895 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-11039 FILM NUMBER: 98776043 BUSINESS ADDRESS: STREET 1: OVERLOOK AT GREAT NOTCH 150 CLOVE RD STREET 2: BOX 449 CITY: LITTLE FALLS STATE: NJ ZIP: 07054 BUSINESS PHONE: 9738121100 MAIL ADDRESS: STREET 1: 150 CLOVE ROAD STREET 2: BOX 449 CITY: LITTLE FALLS STATE: NJ ZIP: 07054 FORMER COMPANY: FORMER CONFORMED NAME: FARADYNE ELECTRONICS CORP DATE OF NAME CHANGE: 19920223 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FELDMAN WARREN CENTRAL INDEX KEY: 0001075854 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: OVERLOOK AT GREAT NOTCH 150 CLOVE RD STREET 2: BOX 449 CITY: LITTLE FALLS STATE: NJ ZIP: 07054 BUSINESS PHONE: 9738121100 MAIL ADDRESS: STREET 1: 150 CLOVE ROAD STREET 2: BOX 449 CITY: LITTLE FALLS STATE: NJ ZIP: 07054 SC 13D 1 WARREN FELDMAN 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment NO. 1) TOTAL-TEL USA COMMUNICATIONS, INC. (Name of Issuer) COMMON STOCK, $.05 PAR VALUE PER SHARE (Title of Class of Securities) 89151T 10-6 (CUSIP Number) WARREN H. FELDMAN 150 CLOVE ROAD LITTLE FALLS, NEW JERSEY 07424-0449 (201) 812-1100 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) DECEMBER 11, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 NAME(S) OF REPORTING PERSON(S) I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) WARREN H. FELDMAN, AND WARREN H. FELDMAN and ESTHER FELDMAN AS JOINT TENANTS - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ] (b)[ ] 1 3 SEC USE ONLY - - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS PF - - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or (e) [ ] - - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES OF AMERICA - - ------------------------------------------------------------------------------ NUMBER OF (7) SOLE VOTING POWER . . . . . . . . . . . 1,030,544 SHARES BENEFICIALLY (8) SHARED VOTING POWER . . . . . . . . . . 0 OWNED BY EACH (9) SOLE DISPOSITIVE POWER. . . . . . . . . 1,030,544 REPORTING PERSON (10) SHARED DISPOSITIVE POWER. . . . . . . . 0 WITH - - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,030,544 - - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.3 * - - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON IN - - ------------------------------------------------------------------------------ * BASED ON 7,721,004 SHARES OF COMMON STOCK OF THE ISSUER OUTSTANDING AS OF DECEMBER 15, 1998, AS REPORTED ON THE ISSUER'S FORM 10-Q, DATED DECEMBER 15, 1998. 2 This Amendment No. 1 amends a schedule 13D filed by the Reporting Persons on or about March 3, 1989. Item 1. Security and Issuer The securities to which this Amendment No. 1 relates are shares of common stock, par value $.05 per share (the "Common Stock"), of Total-Tel USA Communications, Inc, a New Jersey Corporation (the "Issuer"). The principal executive offices of the Issuer are located at 150 Clove Road, Little Falls, New Jersey 07424. Item 2. Identity and Background (a) The persons filing this Amendment No. 1 on Schedule 13D are Warren H. Feldman, and Warren H. Feldman and Esther Feldman, as Joint Tenants (the "Reporting Persons"). (b) The business address of Warren H. Feldman is 150 Clove Road Little Falls, New Jersey 07424. (c) Warren H. Feldman is the Chairman of the Board and Chief Executive Officer of Total-Tel USA Communications, Inc. 150 Clove Road Little Falls, New Jersey 07424 (d) Neither Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Neither Reporting Person has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to such laws. (f) Each Reporting Person is a citizen of the United States of America. Item 3 Source and Amount of Funds or Other Consideration The Reporting Persons have utilized their personal funds to pay for the acquisition of all shares of Common Stock owned by them. Item 4 Purpose of Transaction Except as reported in the response to item 6, which is hereby incorporated by reference, the Reporting Persons have no plans or proposals which relate to, or would have any of the results set forth in, sections (a)-(j) of this item 4. 3 Item 5 Interest in Securities of the Issuer (a) The Reporting Persons collectively are the beneficial owners of a total of 1,030,544 shares of Common Stock, which represents approximately 13.3% of the Common Stock outstanding as of November 11, 1998. Of those shares, 597,920 are held solely by Warren Feldman, 418,624 shares are held by Mr. Feldman as a joint tenant with Esther Feldman, and 14,000 shares are held by Mr. Feldman as a custodian for his minor children. The Reporting Persons intend to sell pursuant to the Purchase Agreement (as most fully described in Item 6) 21,308 of the shares owned solely by Warren Feldman, 394,490 of the jointly owned shares, and 14,000 shares owned by Mr. Feldman as custodian for his children. (b) Number of shares of Common Stock as to which the Reporting Persons have: (i) Sole power to vote or direct the vote: 1,030,544 (ii) Shared power to direct the vote: 0 (iii) Sole power to dispose or to direct the disposition: 1,030,544 (iv) Shared power to dispose or to direct the disposition: 0 (c) Except as described in Item 6 of this Amendment No. 1, the Reporting Persons have had no transactions in the Common Stock during the 60 days preceding the date hereof. Item 6. Contracts, Arrangement, Understandings or Relationships With Respect to Securities of the Issuer On December 10, 1998, the Issuer entered into a Settlement Agreement with Revision, LLC, ("Revision"), a Delaware limited liability corporation, Gold & Appel Transfer, S.A. ("Gold & Appel"), a British Virgin Islands corporation, and Walt Anderson (the "Settlement Agreement") terminating litigation initiated in April 1998 by Gold & Appel and Mr. Anderson against The Issuer (the "Litigation"). Mr. Anderson is the attorney-in-fact for Gold & Appel. The Settlement Agreement also includes the resolution of a proxy contest initiated by Revision and Mr. Anderson in November 1998 to displace certain members of the Issuer's Board of Directors. 4 Also on December 10, 1998, Warren Feldman and Solomon Feldman, the father of Warren Feldman and a director of the Issuer, entered into a Stock Purchase Agreement with Revision and Mr. Anderson providing, among other things, for (i) the purchase by Revision from the Feldmans of between 1,100,000 and 1,200,000 shares of Common Stock for $24 per share ("the Stock Purchase"), (ii) an agreement by the Feldmans and Mr. Anderson to vote their shares in favor of a reconstituted Board of Directors, and (iii) an agreement to negotiate a one-year employment agreement for Warren Feldman under which he will continue to serve as Chairman of the Board and Chief Executive Officer of the Issuer (the "Stock Purchase Agreement"). The Settlement Agreement The Settlement Agreement is filed as Exhibit No. 1 to this Amendment No. 1 and is incorporated herein by reference. The following summary of the terms of the Settlement Agreement is qualified in its entirety by the provisions of the Settlement Agreement. SETTLEMENT OF LITIGATION. Under the terms of the Settlement Agreement, Revision, Gold & Appel, and the Issuer are required to prepare and jointly file, as soon as practicable, a stipulation with the Superior Court, Chancery Division, Passaic County, New Jersey (the "Court"), seeking to dismiss the Litigation with prejudice. The Court is expected to rule on the request for dismissal within the next 30 days. The Issuer, Revision, and Gold & Appel will request the Court to dismiss all orders it previously entered that prohibit Revision, Gold & Appel, Mr. Anderson, Warren Feldman or Solomon Feldman from purchasing or acquiring, directly or indirectly, any additional stock of the Issuer. POSTPONING ANNUAL MEETING OF SHAREHOLDERS. On December 9, 1998, the Issuer postponed its 1998 Annual Meeting, which was originally scheduled for December 10, 1998, because the parties to the Litigation were engaged in settlement negotiations. Under the Settlement Agreement, the Issuer is required to take all actions necessary to reschedule the meeting to a date no later than January 31, 1999 (or in the event that date becomes impracticable due to delays in the satisfaction of the regulatory or court approval conditions to the Stock Purchase, no later than February 28, 1999). PROXY STATEMENTS. The Settlement Agreement provides that the Issuer shall prepare and file with the Securities and Exchange Commission upon the closing of the Stock Purchase, a proxy statement which contains the recommendations of the Board with respect to the election of a new Board at the rescheduled 1998 Annual Meeting. Under the Settlement Agreement, the new Board will consist of the following six individuals: Warren Feldman, two designees of Warren Feldman, Walt Anderson, and two designees of Walt Anderson. 5 THE BY-LAW AMENDMENTS. On April 7, 1998, the Board of Directors amended the Issuer's By-Laws in five respects: (i) a provision establishing June 10 as the date of the annual meeting of shareholders was deleted, and replaced with a provision permitting the Board to schedule the annual shareholders' meeting at its discretion, (ii) a provision was added allowing shareholders to act by written consent in lieu of a meeting, (iii) a provision was deleted which required five day's notice to all directors before amending the By-Laws, (iv) a provision permitting any shareholder who owned 25 percent or more of the Issuer's stock to call a special meeting was deleted, (v) a provision was added that requires submission of notice of shareholder proposals or Board nominees not less than 60 days before the anniversary date of the prior year's shareholders' meeting. On April 8, 1998 -- the day following the adoption of the By-Law amendments -- Gold & Appel and Revision initiated the Litigation by filing suit to invalidate the By-Law amendments and a Shareholders Rights Plan adopted by the Issuer's Board of Directors on March 31, 1998. On April 13, 1998, the Court ordered the Issuer not to implement the By-Law amendments and the Shareholders Rights Plan pending a trial on the merits. Pursuant to the Settlement Agreement, the Board has reinstated the By-Laws that were in effect before March 31, 1998, and agreed that such By-Laws shall remain in effect and will not be amended or modified in any manner until the election of the new Board, at which time such Board will consider and determine appropriate By-Law provisions for the Issuer. AGREEMENT WITH RESPECT TO FUTURE COMMON STOCK PURCHASES. Mr. Anderson and Revision have agreed in the Settlement Agreement that for the one-year period beginning December 10, 1998, neither he nor it, as the case may be, or any of their respective affiliates (other than the Issuer), will purchase, directly or indirectly, any shares of Common Stock for a purchase price of less than $24.00 per share. At the close of trading on December 11, 1998, the Issuer's Common Stock traded for $19.00 per share. FUTURE FINANCING. The Issuer's Board believes that ready access to capital is increasingly important to companies in the telecommunications business, including the Issuer. The Settlement Agreement provides that, during the period in which Walt Anderson serves as the Issuer's director, he and Revision shall use commercially reasonable efforts to assist the Issuer in obtaining any financing needed by it to the extent the Issuer requests such assistance. BOARD APPROVAL OF SETTLEMENT AGREEMENT. At its meeting on December 10, 1998, the Board has concluded that the Settlement Agreement is in the best interests of the Issuer because, among other things, it will end the expense and disruption of litigation and disputes with the Issuer's largest shareholder, bring additional telecommunications expertise and experience into the Issuer, may enhance the Issuer's access to financing, promote management continuity by allowing Warren Feldman to remain as Chairman of the Board for at least a one-year term, and protect shareholders by precluding Anderson, Revision and their affiliates from purchasing the Issuer's shares for less than $24 per share for a period of one year. In connection with this approval of the Settlement Agreement, the Board rescinded the Shareholders Rights Plan, which otherwise would have prevented the entry into the Stock Purchase Agreement and the consummation of the Stock Purchase. 6 REGULATORY MATTERS. The Stock Purchase will require compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Each of the Issuer, Revision, and Walt Anderson are obligated to make any required filing as soon as practicable and to use their best efforts to cause to occur on the earliest practicable date the expiration of the waiting period under the HSR Act. The Settlement Agreement may also require approval of the Federal Communications Commission (the "FCC") if the Settlement Agreement is deemed to involve a change of control of licenses and authorizations issued to the Issuer by the FCC. The Stock Purchase Agreement The Stock Purchase Agreement is filed as Exhibit No. 2 to this Amendment No. 1 and is incorporated herein by reference. The following summary of the terms of the Stock Purchase Agreement is qualified in its entirety by the provisions of the Stock Purchase Agreement. AGREEMENT TO PURCHASE SHARES HELD BY WARREN FELDMAN AND SOLOMON FELDMAN. Under the Stock Purchase Agreement, Revision has agreed to purchase between 1,100,000 and 1,200,000 shares of Common Stock from Warren Feldman and Solomon Feldman and/or their designees at a purchase price of $24.00 per share. The closing of the Stock Purchase Agreement is contingent upon (i) the expiration of the all waiting periods provided under the HSR Act and (ii) the Court having rescinded all outstanding orders in connection with the Litigation that precluded the purchase of the Common Stock. THE RECONSTITUTED BOARD. Under the Stock Purchase Agreement, Warren Feldman and Solomon Feldman each have agreed to use his respective best efforts to cause the resignations three members of the current Board, one of whom is Solomon Feldman, and to fill the vacancies created thereby with Mr. Anderson, Dennis Spina (or if he is unable to serve, another designee of Mr. Anderson), and a designee of Mr. Anderson's who has no affiliation with the Issuer (the "Reconstituted Board"). VOTING AGREEMENTS. For the period commencing 12 months from the date of the Stock Purchase Agreement and ending 24 months later, Mr. Anderson and Revision agree to vote the shares of Common Stock owned by them in favor of the election to the Board of two nominees designated by Warren Feldman (one of whom may be Warren Feldman). During the same period, Warren Feldman and Solomon Feldman agree to vote the shares of Common Stock owned by them in favor of the election to the Board of Directors an unlimited number of nominees designated by Mr. Anderson. These voting agreements will become void if the aggregate ownership of Common Stock by Warren Feldman and Solomon Feldman, on the one hand, or Mr. Anderson or Revision, on the other hand, falls below five percent of the then outstanding shares of Common Stock. 7 WARREN FELDMAN'S EMPLOYMENT CONTRACT. For the 1998 fiscal year Warren Feldman received a base compensation of $287,115 and a $350,000 bonus for his service as Chairman and Chief Executive Officer. Under the Stock Purchase Agreement, Walt Anderson and Revision agree to use their best efforts to cause the Issuer as soon after the Reconstituted Board is elected to enter into a one-year employment contract with Warren Feldman, pursuant to which Warren Feldman would be employed as Chairman of the Board and Chief Executive Officer of the Issuer at a salary of $250,000 per year, and with incentive compensation up to $250,000 as may be determined by the Board based upon performance targets set by the Board for executive officers generally. Such agreement would supersede any prior agreement between Warren Feldman and the Issuer with respect to Mr. Feldman's employment by the Issuer. In its December 10, 1998 resolution, the Issuer's Board of Directors also agreed to waive any buy-back provisions attached to non-statutory stock options held by Warren Feldman. INDEMNITY AGREEMENT. On December 10, 1998, Revision, Warren Feldman, and Solomon Feldman entered into a letter Agreement pursuant to which Revision agreed to indemnify, defend and hold harmless Warren Feldman and Solomon Feldman, (and their respective designees who sell shares of Common Stock to Revision pursuant to the Stock Purchase Agreement) against all losses, claims, damages, costs, expenses, liabilities or judgments or amounts (including all 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 Common Stock by Revision under the Stock Purchase Agreement. Item 7. Material to be Filed as Exhibits. Exhibit 1 Settlement Agreement dated as of December 10, 1998, among the Issuer, Walt Anderson, and Revision, LLC, a Delaware limited liability corporation. Exhibit 2 Stock Purchase Agreement dated as of December 10, 1998, among Warren Feldman, Solomon Feldman, Walt Anderson, and Revision LLC, a Delaware limited liability Issuer. 8 SIGNATURE After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: December 24, 1998 /s/ Warren H. Feldman ____________________________________ Warren H. Feldman /s/ Esther Feldman ____________________________________ Esther Feldman 9 INDEX TO EXHIBITS Exhibit Number Description 1 Settlement Agreement dated as of December 10, 1998, among the Issuer, Walt Anderson, and Revision, LLC, a Delaware limited liability corporation. 2 Stock Purchase Agreement dated December 10, 1998, among Warren Feldman, Solomon Feldman, Walt Anderson, and Revision LLC, a Delaware limited liability corporation. 10 EXHIBIT 1 SETTLEMENT AGREEMENT SETTLEMENT AGREEMENT, made this 10th day of December, 1998, between TOTAL-TEL USA COMMUNICATIONS, INC., a New Jersey corporation (the "Company"), WALT ANDERSON and REVISION LLC, a Delaware limited liability company ("Revision" and collectively with Anderson, the "Committee"). WHEREAS, on or about April 7, 1998, Gold & Appel Transfer, S.A. ("Gold & Appel") filed a complaint against the Company in the Superior Court of New Jersey, Chancery Division, Passaic County (the "Court"), Docket No. PAS-C49-98 (the "Lawsuit") and Revision subsequently became a party to the Lawsuit. WHEREAS, the Lawsuit is currently pending and the parties hereto desire to settle the Lawsuit and petition the Court for the recission of all outstanding orders issued in connection with the Lawsuit, on the terms and conditions set forth herein. WHEREAS, the Company and the Committee have been engaged in a proxy contest with respect to the election of directors of the Company at the Annual Meeting of Stockholders of the Company to be held on December 10, 1998 (the "Meeting") and desire to agree upon a settlement of the matters relating to such proxy contest, on the terms and conditions provided herein. WHEREAS, in connection with such proxy contest the Company has distributed to stockholders a proxy statement dated November 11, 1998, and the Committee has distributed stockholders a proxy statement, dated November 25, 1998. 11 NOW, THEREFORE, for good and valid consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Settlement of Litigation. As soon as practicable after the execution and delivery of this Agreement, Revision, Gold & Appel and the Company shall prepare and file a stipulation dismissing with prejudice the Lawsuit and requesting that the Court orders outstanding in connection with the Lawsuit be rescinded, revoked or otherwise caused to be ineffective, and such parties agree to take all action and deliver and exchange such documents as may be reasonably necessary to cause such dismissal of the Lawsuit and rescission or revocation of such orders. 2. Annual Meeting Date, Proxy Statement and By-Laws. (a) Meeting Date. Upon the execution and delivery of this Agreement, the Company shall promptly take all action necessary to change the date of the Meeting from December 10, 1998 to a date no later than January 31, 1999, or in the event that date becomes impracticable due to delays in the satisfaction of the regulatory or court approval conditions to such closing, no later than February 28, 1999. (b) Proxy Statement. Upon the closing of the Stock Purchase (as defined in Section 3 hereof), the Company shall promptly prepare and file with the Securities and Exchange Commission on a date no later than two business days from the date thereof, a Proxy Statement for solicitation of proxies with respect to the Meeting which contains the recommendation of the Board in favor of the election to the Board of Warren Feldman and two designees of Warren Feldman and Walt Anderson and two designees of Walt Anderson. (c) By-laws of the Company. The By-laws of the Company, dated June 10, 1959 shall remain in effect and shall not be amended or modified in any manner until the election of the reconstituted Board as contemplated by Section 2(b) hereof, at which time such Board shall consider and determine appropriate By-law provisions of the Company. 12 3. HSR Act. Each of the Company, on the one hand, and Revision and Walt Anderson, on the other hand, will, as soon as practicable after the date hereof and in connection with the contemplated purchase by Revision from Warren Feldman and Solomon Feldman (the "Stock Purchase") of up to 1,200,000 additional shares of common stock of the Company ("Common Stock"), prepare and file with the appropriate governmental agencies, the filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Each of the Company, on the one hand, and Revision and Walt Anderson, on the other hand, will use their best efforts to cause to occur on the earliest practicable date the expiration of the waiting period under the HSR Act, and in furtherance of such objective, will take all reasonable actions necessary to comply promptly with all legal requirements or requests for additional information which may be imposed on it with respect thereto and will promptly cooperate with and furnish information to each other in connection with any such requirements imposed upon them. 4. Agreement with respect to Future Purchases. Each of Walt Anderson and Revision agree that during the period commencing on the date hereof and ending on the first anniversary of the date hereof, he or it, as the case may be, and their respective affiliates (other than the Company), will not, directly or indirectly, purchase any shares of Common Stock for a purchase price of less than $24 per share. 5. Additional Agreements; Best Efforts. The parties hereto will agree upon a joint press release to be issued immediately following the execution of this Agreement. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. Until the Board is reconstituted as contemplated by Section 2(b) hereof, the Company shall use its best efforts to provide a copy of any press release or other public disclosure about the transactions contemplated hereby to Walt Anderson prior to dissemination of such press release or other disclosure. 13 6. Future Financing. During the period in which Walt Anderson serves as a director of the Company, Mr. Anderson and Revision agree to use their commercially reasonable efforts to assist the Company in obtaining any financing needed by it to the extent that the Company requests such assistance. 7. Ordinary Course. During the period from the date of this Agreement and continuing until the Board is reconstituted in accordance with Section 2(b) hereof, the Company shall use its best efforts to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and to preserve intact its present business organizations, and to preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. 8. Certain Representations by the Company. The Company hereby represents and warrants to Walt Anderson and Revision that (i) the execution, delivery and performance by the Company of this Agreement has been duly authorized by all action required by law, its certificate of incorporation and by-laws, (ii) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, (iii) the execution, delivery and performance by the Company of this Agreement will not conflict with or result in any breach of any provision of the charter or by-laws of the Company, (iv) the execution, delivery and performance by the Company 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 the Company is a party or by which any of its assets or properties may be bound, (v) subject to the provisions of Sections 1 and 3 hereof, the execution, delivery and performance by the Company of this Agreement will not violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company or any of its properties or assets and (vi) the Company has duly authorized and approved, by all action required by law, including a duly adopted Board resolution, the rescission of the Rights Agreement, dated as of March 31, 1998, between the Company and American Stock Transfer & Trust Company, and such Rights Agreement is void ab initio. 14 9. Certain Representations by Revision and Walt Anderson. Revision hereby represents and warrants to the Company 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 and (v) subject to the provisions of Sections 1 and 3 hereof, 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. Anderson hereby represents and warrants to the Company that 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 subject to the provisions of Sections 1 and 3 hereof, 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 or any of his properties or assets. 10. Entire Agreement. This Agreement contains the entire agreement between the parties hereto and constitutes the complete, final and exclusive embodiment of their agreement with respect to the subject matter hereof, and supercedes all prior or contemporaneous agreements, understandings, representations and statements, oral or written. 11. Notices. 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 the Company: Total-Tel USA Communications, Inc. 150 Clove Road Little Falls, New Jersey Attn: Warren Feldman Facsimile No.: (973) 785-5173 15 With a copy to: Covington & Burling 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20044 Attn: Bobby R. Burchfield, Esq. Facsimile No.: (202) 778-5350 And a copy to: Jay Miller, Esq. 430 East 57th Street, Suite 5D New York, New York 10022 Facsimile No.: (212) 758-0624 (b) If to Revision or Anderson: Walt Anderson c/o Gold & Appel 1023 31st Street, 4th Floor Washington, D.C. 20007 Facsimile No.: (202)736-5065 With a copy to: Swidler Berlin Shereff Friedman, LLP 919 Third Avenue New York, NY 10022 Attn: Richard Goldberg, Esq. Facsimile No.: (212) 758-9526 Any such notice shall be deemed received, if mailed, five days after mailing, or one day after sending by overnight courier, or upon confirmation of transmission if sent by facsimile transmission. 12. 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 the conflict of laws provisions thereof. 13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument. 16 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first above written. TOTAL-TEL USA COMMUNICATIONS, INC. By: /s/ Warren Feldman ----------------------------- Name: Warren Feldman Title: REVISION LLC By: /s/ Walt Anderson ----------------------------- Name: Walt Anderson Title: Manager /s/ Walt Anderson ---------------------------- Walt Anderson Evidencing agreement with respect to the provisions of Section 1 hereof only and not with respect to any other provision of this Agreement: GOLD & APPEL TRANSFER, S.A. By: /s/ Walt Anderson ------------------------------- Walt Anderson, Attorney-In-Fact 16 EXHIBIT 2 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT made this 10th day of December, 1998, between WARREN FELDMAN, SOLOMON FELDMAN, WALT ANDERSON and REVISION LLC, a Delaware limited liability company ("Revision"). WHEREAS, each of the parties hereto is a stockholder of Total-Tel USA Communications, Inc., a New Jersey corporation (the "Company"). WHEREAS, the parties hereto desire to enter into certain agreements regarding the purchase by Revision from Warren Feldman and Solomon Feldman and/or their designees of up to 1,200,000 shares of Common Stock of the Company ("Common Stock"), on the terms and subject to the conditions set forth herein. WHEREAS, the parties hereto desire to enter into certain agreements regarding the voting of their shares of Common Stock and certain other matters, on the terms and subject to the conditions set forth herein. NOW, THEREFORE, for good and valid consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Purchase and Sale of Shares. (a) General Terms. Revision agrees to purchase from Warren Feldman, Solomon Feldman, and if so designated, one or more of their designees (in an amount to be determined by Warren Feldman and Solomon Feldman), and Warren Feldman and Solomon Feldman agree to sell, up to an aggregate of 1,200,000 shares of Common Stock, but not less than 1,100,000 shares of Common Stock, at a purchase price of $24 per share upon the terms and subject to the conditions set forth herein. Prior to December 20, 1998, Warren Feldman and Solomon Feldman shall deliver to Revision a written notice (the "Designee Notice"), setting forth the aggregate number of shares which shall be purchased by Revision pursuant to this Section 1, listing each designee (the "Designees", which term shall include Warren Feldman and Solomon Feldman) who will sell shares, the number of shares to be sold by each such Designee, the account information (name of bank, address of bank, ABA number and bank account number) to which the purchase price payment for such designee should be wired, and the purchase price. The Deposit (as defined below) shall be paid at the closing as directed by Warren Feldman and Solomon Feldman and shall be credited against the purchase price. The Designees shall be solely responsible for any transfer taxes payable in respect of the sale of the Common Stock under this Agreement. 17 (b) Representations and Warranties of Designees. The Designee Notice shall be accompanied by signed statements of each Designee (the "Designee Statements"), pursuant to which each Designee represents and warrants to Revision that (i) such Designee is the sole beneficial and record owner of all right, title and interest in and to the shares to be sold to Revision, 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, (ii) upon the delivery of the stock certificates at the closing, such Designee will transfer good, valid and marketable title to the shares 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 (iii) such Designee shall, at the closing deliver to Revision, a certificate confirming that the representations of such Designee made therein are true as of the closing date. Warren Feldman beneficially owns between 1,000,544 and 1,035,524 shares of Common Stock and Solomon Feldman beneficially owns between 886,380 and 927,260 shares of Common Stock (in each case exclusive of stock options), and each of Warren Feldman and Solomon Feldman hereby makes the representations and warranties set forth in this Section 1(b) with respect to himself and the shares which he owns as of the date hereof. (c) Representations of Revision. Revision represents and warrants to each of Warren Feldman, Solomon Feldman and each Designee that it is acquiring up to 1,200,000 shares of Common Stock pursuant to the provisions of this Section 1 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"). Revision further represents that it is an Accredited Investor within the meaning ascribed to such term under Regulation D of the rules and regulations promulgated under the Securities Act. (d) Conditions to Closing and the Closing. It shall be a condition to the purchase and sale of shares contemplated under this Section 1 that (i) the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") applicable to the purchase by Revision of the aggregate number of shares to be purchased pursuant to this Section 1 shall have expired or been terminated and (ii) the Superior Court of New Jersey, Chancery Division, Passaic County (the "Court") shall have rescinded, revoked or otherwise caused to be ineffective any Court orders outstanding in connection with the lawsuit against the Company which was filed in the Court on or about April 7, 1998, by Gold & Appel Transfer, S.A., Docket 18 No. PAS-C49-98. The closing of the purchase and sale of shares contemplated in this Section 1 shall occur at 10:00 a.m. on the date that is two business days after the satisfaction of both of the conditions set forth in the preceding sentence; provided however that the closing date shall in no event be earlier than January 2, 1999. The closing shall take place at the offices of Swidler Berlin Shereff Friedman, LLP, 919 Third Avenue, New York, New York. On the closing date, Revision shall pay to each Designee the purchase price (net of such Designee's pro rata share of the Deposit as designated pursuant to Section 1(a)) by wire transfer to the account set forth in the Designee Notice and each Designee shall deliver the stock certificates for the shares duly endorsed or with stock power attached together with the representation letter required pursuant to of Section 1(b) above. (e) Deposit. Within five (5) business days of the execution and delivery of this Agreement, Revision shall transfer $4,000,000 by wire transfer to Swidler Berlin Shereff Friedman, LLP as escrow agent (the "Escrow Agent"), and such $4,000,000 shall be held in escrow by the Escrow Agent as a deposit ("Deposit") pursuant to an escrow agreement containing the terms of this Section 1(e) and other customary terms. In the event that prior to the closing, the Escrow Agent receives a written notice from Revision, on the one hand, or Warren Feldman or Solomon Feldman, on the other hand, stating that a material breach by the other party has occurred under this Agreement or, in the case of a notice by Revision that a material breach by the Company has occurred under that certain agreement dated the date hereof by and among the Company, Walt Anderson and Revision, then, the Deposit, together with interest earned thereon, shall be delivered to the nonbreaching party unless the party alleged to have breached (or Warren Feldman or Solomon Feldman in the case of an alleged breach by the Company) shall deliver, within five business days of notice thereof, a notice of objection to the Escrow Agent in which case the Deposit shall not be disbursed from escrow until such time as the Escrow Agent has received joint written instructions of Warren Feldman, Solomon Feldman and Walt Anderson, directing the disbursement of such Deposit or until such time as the Escrow Agent has received a court order from a court of competent jurisdiction directing the disposition of such Deposit. At least one business day prior to the closing, Warren Feldman, Solomon Feldman and Walt Anderson shall deliver to the Escrow Agent joint written instructions directing the transfer of the Deposit. Each disbursement of the Deposit from escrow shall include the pro rata portion of interest income, if any, with respect to such disbursement amount. In the event that Revision is legally prohibited from purchasing the shares of the Common Stock as contemplated under this Section 1 due to a failure to be satisfied of one of the conditions to closing contained in Section 1(d) by February 28, 1999, the Deposit, together with interest earned thereon, shall be returned to Revision unless Warren Feldman or Solomon Feldman shall have delivered notice of objection within five business days of notice from the Escrow Agent of the intended payment to Revision, in which case the Deposit shall not be disbursed from escrow until such time as the Escrow Agent has received joint written instructions of Warren Feldman, Solomon Feldman and Walt Anderson, directing the disbursement of such Deposit or until such time as the Escrow Agent has received a court order from a court of competent jurisdiction directing the disposition of such Deposit. 19 2. Board of Directors. Immediately following the closing of the sale of shares pursuant to Section 1 hereof, Warren Feldman and Solomon Feldman shall use their respective best efforts to cause the resignation of Messrs. Solomon Feldman, Brad Berger and Joseph Kelly from the Board of Directors of the Company (the "Board") and to cause the election to the Board of the following persons to the vacancies on the Board created thereby: (a) Walt Anderson, (b) Dennis Spina or if he is unable to serve, another designee of Mr. Anderson, and (c) an individual who has no affiliation with the Company and is designated by Walt Anderson. (The six members of the Board as reconstituted pursuant to the terms of this Section 2 are sometimes referred to herein as the "Reconstituted Board".) 3. Voting Agreements. (a) Next Annual Meeting. At the next Annual Meeting of Shareholders of the Company to be held no later than February 28, 1999 and for a period ending one year from the date hereof, Walt Anderson and Revision agree, on the one hand, and Warren Feldman and Solomon Feldman agree, on the other hand, to vote the shares of Common Stock owned by them in favor of the election to the Board of the six members of the Reconstituted Board, or if any one of such members shall be unwilling or unable to serve, then in favor of a substituted designee of Walt Anderson or Warren Feldman, as the case may be. For a period of one year commencing on the date hereof, the parties agree to use their respective best efforts to cause the number of directors comprising the complete Board to be fixed at six (6). (b) Subsequent Period. For the period commencing 12 months from the date hereof and ending 36 months from the date hereof, Walt Anderson and Revision agree to vote the shares of Common Stock beneficially owned by them in favor of the election to the Board of Directors of the Company of two nominees designated by Warren Feldman (one of whom may be Warren Feldman). For the period commencing 12 months from the date hereof and ending 36 months from the date hereof, Warren Feldman and Solomon Feldman agree to vote the shares of Common Stock beneficially owned by them in favor of the election to the Board of Directors of the Company of the nominees (regardless of the number of such nominees) designated by Walt Anderson. The provisions of this Section 3(b) shall cease to be of any further force and effect if at any time the aggregate beneficial ownership of Common Stock by Warren Feldman and Solomon Feldman on the one hand, or Walt Anderson and Revision, on the other hand, shall fall below 5% of the then outstanding Common Stock. (c) Feldman Employment Contract. Walt Anderson and Revision agree to use their best efforts to cause the Company as soon as practical after the Reconstituted Board is elected to enter into a one year employment contract with Warren Feldman, pursuant to which Warren Feldman will be employed as Chief Executive Officer and Chairman of the Board of the Company at a salary of $250,000 per year and with incentive compensation up to $250,000 as may be determined by the Board based upon performance targets set by the Board for executive officers generally. Such agreement will supercede any prior agreements between Warren Feldman and the Company with respect to Mr. Feldman's employment by the Company. 20 4. Ordinary Course. During the period from the date of this Agreement and continuing until the Board is reconstituted in accordance with Section 2 hereof, each of Warren Feldman and Solomon Feldman shall use their respective best efforts to cause the Company to carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted and use its best efforts to preserve intact its present business organizations, and to preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. 5. Additional Agreements; Best Efforts. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use its best efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. 6. Certain Representations by the Feldmans. Each of Warren Feldman and Solomon Feldman hereby represents and warrants 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 provisions of Section 1(d) hereto, 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, and (iii) to the best of their knowledge after due inquiry, except as disclosed in the forms, reports, schedules, statements and other documents filed by the Company under the Securities Exchange Act of 1934, as amended, and in the draft financial statements with respect to the fiscal quarter of the Company ended October 31, 1998, which were provided to Walt Anderson, since January 31, 1998, there have been no events, changes or effects (excluding any of the foregoing which affect the industry generally, and are not specific to the Company) having, individually or in the aggregate, a material adverse effect on the Company. 7. Certain Representations by Revision and Walt Anderson. Revision hereby represents and warrants 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, 21 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 provisions of Section 1(d) hereto, 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) Revision is the sole beneficial and record owner of all right, title and interest in and to 1,857,434 shares of Common Stock, 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 (vii) Revision has no outstanding indebtedness for borrowed money. Anderson hereby represents and warrants 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, and (ii) subject to the provisions of Section 1(d) hereto, 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. 8. Assignment. This Agreement shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. None of Warren Feldman or Solomon Feldman, on the one hand, or Walt Anderson or Revision, on the other hand, shall have the right to assign or transfer shares of Common Stock or its rights or obligations under this Agreement to an affiliate of such party unless (i) such transferee affiliate has a net worth (calculated in accordance with generally accepted accounting principles) at least equal to the net worth of the transferor immediately prior to such transfer and (ii) such transferee affiliate assumes the obligations of the transferor hereunder. 9. Entire Agreement. This Agreement contains the entire agreement between the parties hereto and constitutes the complete, final and exclusive embodiment of their agreement with respect to the subject matter hereof, and supercedes all prior or contemporaneous agreements, understandings, representations and statements, oral or written. 22 10. Notices. 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 the Warren Feldman or Solomon Feldman: Total-Tel USA Communications, Inc. 150 Clove Road Little Falls, New Jersey 07424 Attn: Warren Feldman Facsimile No.: (973) 785-5173 With a copy to: Covington & Burling 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20044 Attn: Bobby R. Burchfield, Esq. Facsimile No.: (202) 778-5350 (b) If to Revision or Anderson: Walt Anderson c/o Gold & Appel 1023 31st Street, 4th Floor Washington, D.C. 20007 Facsimile No.: (202)736-5065 With a copy to: Swidler Berlin Shereff Friedman, LLP 919 Third Avenue New York, New York 10022 Attn: Richard Goldberg, Esq. Facsimile No.: (212) 758-9526 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. 23 11. Notice on Behalf of Other Parties. Any notice, designation or determination required to be made or delivered hereunder by Warren Feldman or Solomon Feldman shall be binding on the other if made or delivered by either of such parties. Any notice, designation or determination required to be made or delivered hereunder by Revision or Walt Anderson shall be binding on the other if made or delivered by either of such parties. 12. 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 the conflict of laws provisions thereof. 13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument. 24 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed the day and year first above written. /s/ Warren Feldman ------------------------ Warren Feldman /s/ Solomon Feldman ------------------------ Solomon Feldman REVISION LLC By: /s/ Walt Anderson ----------------------- Name: Walt Anderson Title: Manager /s/ Walt Anderson ----------------- Walt Anderson -----END PRIVACY-ENHANCED MESSAGE-----