PUT AND CALL AGREEMENT
This PUT AND CALL AGREEMENT (this "Agreement") dated as of the 31st day
of December, 1997, is entered into by and among TOUCH TONE AMERICA, INC. (the
"Company") and INFINITY INVESTORS LIMITED ("Purchaser").
WITNESSETH:
WHEREAS, the Company and Purchaser have executed and delivered as of the
date hereof that certain Option Agreement to which this Agreement is appended
(the "Option Agreement").
NOW THEREFORE, the parties hereto agree as follows:
1. GENERAL. Capitalized terms not otherwise defined herein shall have
the meaning defined in the Option Agreement.
2. PUT OPTION.
(a) On December 31, 1999 (the "Put Date"), the Company shall have
the right (the "Put Right") to require that the Purchaser repurchase all
(but not less than all) of the Transferred UPC Securities then owned by
the Company (the "Put Option") at a purchase price equal to the product of
thirty percent (30%) multiplied by the aggregate Exchange Amount of all
Transferred UPC Securities being repurchased on the Put Date (the "Put
Price"). The Company shall be entitled to exercise the Put Right by
delivering to the Purchaser a written notice specifying (i) the aggregate
Transferred UPC Securities then owned by the Company and to be purchased
under the Put Option, (ii) the aggregate Put Price, and (iii) the date,
not earlier than ten (10) but not later than thirty (30) days after the
Put Date, on which the Put Option shall be exercised (the "Put Exercise
Date"). Notwithstanding the Put Price as stated above, if during the
period commencing on the first anniversary of the Closing Date and ending
on the date immediately preceding the Put Date (the "Testing Period"), the
average Closing Bid Price of the Common Stock for each Trading Day during
the Testing Period equals or exceeds $7.50 (as adjusted for any events
specified in Paragraph VI C. of the Series B Certificate of Designation),
then the Put Price shall be equal to one hundred percent (100%) of the
Exchange Amount of the Transferred UPC Securities then owned by the
Company and to be purchased by the Purchaser under the Put Option.
Notwithstanding anything to the contrary herein, the Purchaser shall not
be required to repurchase any Transferred UPC Securities if (x) there
shall exist any Lien thereon, (y) the terms, rights, preferences and
obligations of such Transferred UPC Securities have been amended, altered
or modified in any manner after the date hereof, without the prior written
consent of the Purchaser, which consent may be
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PUT AND CALL AGREEMENT - Page 1
withheld in the sole discretion of the Purchaser or (z) any Event of
Default shall then exist under the Option Agreement.
(b) Assuming the Company has properly exercised the Put Right and
the Purchaser is required to repurchase the Transferred UPC Securities
then owned by the Company pursuant to subsection (a) above, on the Put
Exercise Date (i) the Company shall deliver to the Purchaser the
Transferred UPC Securities, properly endorsed, subject to the Put Option,
and (ii) the Purchaser shall deliver to the Company the applicable Put
Price, at the sole and exclusive option of the Purchaser, either (x) in
immediately available funds, (y) in exchange for the assignment to the
Company of the Convertible Instruments issued under either the Option
Agreement and/or the Securities Purchase Agreement dated the date of the
Option Agreement and attached thereto (or a combination of such
Convertible Instruments, as such terms are defined therein, as selected by
the Purchaser) (collectively, the "Touch Tone Securities") or (z) in any
combination of the items specified in (x) and (y) above; provided, that
the Purchaser shall not be authorized to pay all or any portion of the Put
Price in Touch Tone Securities if there shall exist any Lien thereon
created by the Purchaser after the Closing Date.
3. CALL OPTION.
(a) The Purchaser shall have the right, but not the obligation,
commencing on the Put Date and continuing for a period of thirty (30) days
thereafter, to purchase from the Company (the "Call Option") any or all of
the Transferred UPC Securities then owned by the Company at a call price
of one hundred and ten percent (110%) of the aggregate Exchange Amount of
the Transferred UPC Securities then owned by the Company (the "Call
Price"), by delivering to the Company a written notice from the Purchaser
specifying (i) the Transferred UPC Securities to be purchased by the
Purchaser, (ii) the Call Price, and (iii) the date, not earlier than ten
(10) and not later than thirty (30) days, on which the Call Option shall
be exercised (the "Call Exercise Date").
(b) On the Call Exercise Date (i) the Company shall deliver to the
Purchaser the Transferred UPC Securities, properly endorsed, subject to
the Call Option and (ii) the Purchaser shall deliver to the Company, in
immediately available funds, the applicable Call Price.
4. COMPANY NOTICE TO PURCHASER.
(a) The Company shall, from time to time, notify the Purchaser of
any sale, transfer or other disposition by the Company of any Transferred
UPC Securities received by the Company in each Exchange.
(b) The Transferred UPC Securities (other than the UPC Common
Shares) shall bear a legend referring to this Agreement, and any assignee
or transferee of the
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Transferred UPC Securities (other than the UPC Common
Shares) shall take such securities subject to the Call Option set forth in
terms of this Agreement.
5. MISCELLANEOUS.
(a) NO ASSIGNMENT OR TRANSFER. Neither this Agreement, nor the Put
Option or the Call Option granted hereby, nor any other rights under this
Agreement, shall be assignable or transferable, directly or indirectly;
PROVIDED, the Purchaser may assign the Call Option to any Affiliate of any
Purchaser.
(b) NOTICES. All notices, requests and demands to or upon the
parties hereto shall be in writing and shall be delivered by the method
and at the address set forth in the Option Agreement. For purposes of this
Agreement, the date of a "Notice Date" shall be the date a notice or other
communication is deemed effective pursuant to Section 11.1 of the Option
Agreement.
(c) FURTHER ASSURANCES. The parties agree to do all things and to
deliver all instruments and documents necessary to accomplish the purposes
of this Agreement, and to provide to one another such information and
assistance necessary to enable one another to do the same.
(d) GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance
with the laws of the State of Nevada.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INFINITY INVESTORS LIMITED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
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TOUCH TONE AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: President and Chief Executive Officer
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