Securities and Exchange Commission
Washington, D.C. 20549
Schedule 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Tel-Save.com, Inc.
(formerly, Tel-Save Holdings, Inc.)
-----------------------------------
(Name of Issuer)
Common Stock
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(Title of Class of Securities)
879176 10 5
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(CUSIP Number)
Paul Rosenberg
600 North 4th Street
Philadelphia, PA 19123
(215) 928-9875
-----------------------------------
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
January 12, 1999
------------------------------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. | |
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 ("Act") 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).
<PAGE>
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1) Names of Reporting Persons; I.R.S. Identification Nos. (entities only)
Paul Rosenberg
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ____
(b) X
----
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3) SEC Use Only
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4) Source of Funds (See Instructions) OO
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
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6) Citizenship or Place of Organization United States
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Number of 7) Sole Voting Power 15,750(1)
Shares ___________________________________________
Beneficially
Owned by 8) Shared Voting Power 5,744,235(2)
Each Reporting ___________________________________________
Person With
9) Sole Dispositive Power 15,750(1)
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10) Shared Dispositive Power 5,744,235(2)
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11) Aggregate Amount Beneficially 5,759,985(1)(2)
Owned by Each Reporting Person
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12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 9.8%
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14) Type of Reporting Persons (See Instructions) IN
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(1) Includes 750 shares that may be acquired upon exercise of a right to
purchase.
(2) Includes 273,535 shares that may be acquired upon exercise of a right to
purchase.
<PAGE>
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1) Names of Reporting Persons; I.R.S. Identification Nos. (entities only)
Rosenberg Family Limited Partnership
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ______
(b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions) AF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
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6) Citizenship or Place of Organization Pennsylvania
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Number of 7) Sole Voting Power 0
Shares ___________________________________________
Beneficially
Owned by 8) Shared Voting Power 5,639,235(1)
Each Reporting ___________________________________________
Person With
9) Sole Dispositive Power 0
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10) Shared Dispositive Power 5,639,235(1)
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11) Aggregate Amount Beneficially 5,639,235(1)
Owned by Each Reporting Person
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12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 9.6%
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14) Type of Reporting Persons (See Instructions) PN
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(1) Includes 268,535 shares that may be acquired upon exercise of a right to
purchase.
<PAGE>
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1) Names of Reporting Persons; I.R.S. Identification Nos. (entities only)
PBR, Inc.
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ______
(b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions) AF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
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6) Citizenship or Place of Organization Pennsylvania
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Number of 7) Sole Voting Power 0
Shares ___________________________________________
Beneficially
Owned by 8) Shared Voting Power 5,639,235(1)
Each Reporting ___________________________________________
Person With
9) Sole Dispositive Power 0
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10 Shared Dispositive Power 5,639,235(1)
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11) Aggregate Amount Beneficially 5,639,235(1)
Owned by Each Reporting Person
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12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 9.6%
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14) Type of Reporting Persons (See Instructions) CO
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(1) Includes 268,535 shares that may be acquired upon exercise of a right to
purchase.
<PAGE>
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1) Names of Reporting Persons; I.R.S. Identification Nos. (entities only)
The New Millennium Charitable Foundation
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) ______
(b) X
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3) SEC Use Only
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4) Source of Funds (See Instructions) AF
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)
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6) Citizenship or Place of Organization Pennsylvania
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Number of 7) Sole Voting Power 0
Shares ___________________________________________
Beneficially
Owned by 8) Shared Voting Power 105,000(1)
Each Reporting ___________________________________________
Person With
9) Sole Dispositive Power 0
-------------------------------------------
10) Shared Dispositive Power 105,000(1)
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11) Aggregate Amount Beneficially 105,000(1)
Owned by Each Reporting Person
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12) Check if the Aggregate Amount in Row (11)
Excludes Certain Shares (See Instructions)
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13) Percent of Class Represented by Amount in Row (11) 0.2%
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14) Type of Reporting Persons (See Instructions) CO
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(1) Includes 5,000 shares that may be acquired upon exercise of a right to
purchase.
<PAGE>
Item 1. Security and Issuer.
(a) The class of equity securities to which this Statement on Schedule 13D
relates is Common Stock, par value $.01 per share ("Common Stock"), of
Tel-Save.com, Inc. (formerly Tel- Save Holdings, Inc.), a Delaware corporation
(sometimes referred to as "Company" or "Issuer").
(b) The principal executive offices of the Company are located at 6805
Route 202, New Hope, PA 18938.
Item 2. Identity and Background.
This Schedule 13D is filed by the following persons (collectively, the
"Filers"):
(1) Paul Rosenberg, an individual;
(2) Rosenberg Family Limited Partnership, a Pennsylvania limited
partnership ("Family Limited Partnership");
(3) PBR, Inc., a Pennsylvania corporation ("PBR"); and
(4) The New Millennium Charitable Foundation (formerly, The Mickey Rubin
Foundation), a Pennsylvania non-profit corporation ("Foundation").
The Common Stock to which this Schedule 13D relates is owned of record as
follows: 5,370,700 shares by Family Limited Partnership; 100,000 shares by
Foundation and 15,000 shares by Mr. Rosenberg. PBR is the sole general partner
of Family Limited Partnership and is wholly owned by Mr. Rosenberg. Mr.
Rosenberg is the sole limited partner of Family Limited Partnership. Mr.
Rosenberg is the president and sole director of Foundation.
Mr. Rosenberg is currently the sole owner and President of National
Telecoin Corporation. His business address is 600 North 4th Street,
Philadelphia, PA 19123. Mr. Rosenberg is a citizen of the United States.
The business address for each of Family Limited Partnership and PBR is 1407
Fox Place, West Chester, PA 19382. The business address of Foundation is c/o
Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, 51st Floor,
Philadelphia, PA 19103.
During the past five years, none of the Filers has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors), nor
has any of them 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, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
In connection with and prior to the consummation of the initial public
offering of the Company, all of the shares of Tel-Save, Inc., a Pennsylvania
corporation, owned by its existing stockholders, Daniel M. Borislow and Paul
Rosenberg, were contributed to the Company pursuant to a
<PAGE>
Plan of Reorganization dated as of August 28, 1995 ("Plan of Reorganization").
Pursuant to the Plan of Reorganization, Mr. Rosenberg exchanged all of his
shares of Tel-Save, Inc. and (i) entered into certain agreements with the
Company and (ii) received (a) 2,530,000 shares of Common Stock; (b) $4,500,000
in cash; and (c) a Cash Flow Note from the Company in the original principal
amount of $6,900,000, bearing interest at the rate of 10% per annum. This Plan
of Reorganization is listed as an exhibit in Item 7 and discussed more fully in
Item 6.
As a result of a 50% stock dividend distributed on March 15, 1996 and a
100% stock dividend distributed on January 31, 1997, Mr. Rosenberg's holdings of
Common Stock increased from 2,530,000 shares to 7,590,000 shares.
On May 30, 1997, Mr. Rosenberg transferred 100,000 shares of Common Stock
to Foundation.
On December 23, 1997, Mr. Rosenberg transferred 7,325,000 shares of Common
Stock to Family Limited Partnership.
Item 4. Purpose of Transaction.
As described in Item 3 (which is incorporated herein by reference in its
entirety), Mr. Rosenberg acquired for investment purposes the shares of Common
Stock subject to this Schedule 13D pursuant to the Plan of Reorganization. He
subsequently transferred 100,000 shares to Foundation and 7,325,000 shares to
Family Limited Partnership.
Family Limited Partnership, Foundation and Mr. Rosenberg may each dispose
of all or a portion of the shares of Common Stock held by it or him, subject to
the limitations described in Item 6. None of the Filers has any present plans or
proposals which relate to or would result in: (i) the acquisition by any person
of additional securities of the Company or the disposition of securities of the
Company; (ii) an extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Company or any of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (iv) any change in the present board of directors or
management of the Company, including any plans or proposals to change the number
or term of directors or to fill any existing vacancies on the board; (v) any
material change in the present capitalization or dividend policy of the Company;
(vi) any other material change in the Company's business or corporate structure;
(vii) changes in the Company's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Company by any person; (viii) causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be authorized to be
quoted on an inter-dealer quotation system of a registered national securities
association; (ix) a class of equity securities of the Company becoming eligible
for termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended, or (x) any actions similar to any of those
enumerated above.
Item 5. Interest in Securities of the Issuer.
(a)-(b) Items 7, 8, 9, 10, 11 and 13 from pages 2, 3, 4 and 5 of this
Schedule 13D are incorporated herein by reference.
Prior to December 31, 1998, the shares of Common Stock held by Mr.
Rosenberg, Foundation and Family Limited Partnership were subject to a Voting
Trust Agreement pursuant to
<PAGE>
which Daniel Borislow, as voting trustee, could vote in person or by proxy at
any annual or special meeting of stockholders of the Company or could consent to
action taken without a meeting in such manner on behalf of Mr. Rosenberg,
Foundation or Family Limited Partnership. The Voting Trust Agreement was
terminated by Mr. Borislow as of December 31, 1998.
(c) Between December 29, 1998 and January 12, 1999, Family Limited
Partnership sold an aggregate of 1,754,300 shares of Common Stock in open market
transactions at prices ranging from $15.00 to $20.50.
The Company declared a dividend, payable to holders of record as of
December 31, 1998, of one right to purchase a share of Common Stock for every 20
shares (or shares subject to warrants or options) held. As a result of that
dividend declaration, Mr. Rosenberg will receive rights to purchase
approximately 750 shares of Common Stock, Family Limited Partnership will
receive rights to purchase approximately 268,535 shares of Common Stock, and the
Foundation will receive rights to purchase approximately 5,000 shares of Common
Stock.
As a result of the transactions described above, Mr. Rosenberg beneficially
owns 5,759,985 shares of Common Stock (including 274,285 shares subject to
rights), representing approximately 9.8% of the outstanding shares of Common
Stock.
(d) N/A
(e) N/A
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Item 5(b) of this Schedule 13D is incorporated herein by reference.
In connection with and prior to the consummation of the initial public
offering of the Company, the shares of Tel-Save, Inc., a Pennsylvania
corporation, owned by its existing stockholders, Daniel M. Borislow and Paul
Rosenberg, were contributed to the Company pursuant to a Plan of Reorganization.
Pursuant to the Plan, Mr. Rosenberg received 2,530,000 shares of Common Stock;
$4,500,000 in cash; and a Cash Flow Note in the original principal amount of
$6,900,000 bearing interest at the rate of 10% per annum and entered into the
following agreements: (z) Tax Indemnification Agreement by and among Paul
Rosenberg, Daniel Borislow and Tel-Save, Inc. and the Company; (y) Guarantee and
Stock Pledge Agreement by and among Paul Rosenberg, Daniel Borislow and
Midlantic Bank; (x) Voting Trust Agreement; (w) Co-Sale/Right of First Refusal
Agreement by and among Daniel Borislow, Paul Rosenberg and the Company; and (v)
Registration Rights Agreement between the Company and Paul Rosenberg.
The Tax Indemnification Agreement and Cash Flow Note were personally
guaranteed by Daniel Borislow and the Guarantee was collateralized with 539,063
shares of Common Stock owned by Daniel Borislow.
The Voting Trust Agreement was terminated as of December 31, 1998. See Item
5(b) of this Schedule 13D.
<PAGE>
Until five (5) years from the final closing date of the Company's initial
public offering, (i) Mr. Borislow has granted Mr. Rosenberg a right to
participate with Mr. Borislow in any sales made of Mr. Borislow's shares of
Common Stock at the same price per share and on the same terms, subject to
exceptions for sales of shares of Common Stock pursuant to Rule 144 of the
Securities Act of 1933 and sales after Mr. Rosenberg's ownership of shares of
Common Stock is less than four percent (4%) of the outstanding shares of Common
Stock, and (ii) Mr. Rosenberg has granted to Mr. Borislow a right of first
refusal on Mr. Rosenberg's shares of Common Stock subject to similar exceptions
described in (i) above.
Commencing one (1) year and ending five (5) years after the closing of the
Company's initial public offering, Paul Rosenberg, has the right to demand of
the Company the registration of his shares of Common Stock once each calendar
year and to require the Company to maintain that registration in effect for
ninety (90) days subject to certain limitations. Mr. Rosenberg also has the
right, for five (5) years after such closing, to participate in certain other
registrations filed by the Company subject to certain limitations.
In connection with Mr. Rosenberg's transfer of 7,325,000 shares of Common
Stock to Family Limited Partnership, Mr. Rosenberg, Mr. Borislow, the Company
and Family Limited Partnership entered into an Agreement to Substitute Family
Limited Partnership pursuant to which Family Limited Partnership became entitled
to the same rights and privileges, and subject to the same obligations, under
the Voting Trust Agreement, Registration Rights Agreement and Co-Sale/Right of
First Refusal Agreement as were originally applicable to Mr. Rosenberg.
Mr. Rosenberg, Family Limited Partnership and Foundation have entered into
an Agreement with the Company pursuant to which Mr. Rosenberg and Family Limited
Partnership have agreed not to sell or transfer their shares of Common Stock
during the period from January 25, 1999 through (and including) July 20, 1999,
with certain exceptions, and Foundation has agreed not to sell or transfer its
shares of Common Stock during the period from January 25, 1999 through (and
including) February 21, 1999 or during the period from April 24, 1999 through
(and including) July 20, 1999, in each case, with certain exceptions.
Item 7. Material to Be Filed as Exhibits
Exhibit 1.1 - Plan of Reorganization between and among Tel-Save Holdings, Inc.,
Tel-Save, Inc., Daniel Borislow and Paul Rosenberg dated
August 28, 1995.*
Exhibit 1.2 - Voting Trust Agreement between Daniel Borislow and Paul
Rosenberg.**
Exhibit 1.3 - Cash Flow Note of Tel-Save Holdings, Inc.**
Exhibit 1.4 - Tax Indemnification Agreement by and among Paul Rosenberg, Daniel
Borislow, Tel-Save, Inc. and Tel-Save Holdings, Inc. dated
August 28, 1995.**
Exhibit 1.5 - Guarantee and Stock Pledge Agreement by and among Daniel Borislow,
Paul Rosenberg and Midlantic Bank dated September 25, 1995.**
Exhibit 1.6 - Co-Sale/Right of First Refusal Agreement by and among Daniel
Borislow, Paul Rosenberg and Tel-Save Holdings, Inc. dated
September 25, 1995.**
<PAGE>
Exhibit 1.7 - Registration Rights Agreement between Paul Rosenberg and Tel-Save
Holdings, Inc. dated September 25, 1995.**
Exhibit 1.8 - Agreement to Substitute Family Limited Partnership by and among
Paul Rosenberg, Daniel Borislow, Tel-Save Holdings, Inc. and
Rosenberg Family Limited Partnership dated as of
December 19, 1997.**
Exhibit 1.9- Agreement among Paul Rosenberg, Rosenberg Family Limited
Partnership, The New Millennium Charitable Foundation and
Tel-Save.com, Inc. dated as of January 25, 1999.
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* Incorporated by reference from Tel-Save Holdings, Inc. Registration
Statement (No. 33-94940).
** Previously filed.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement on Schedule 13D is
true, complete and correct as of the date hereof.
Dated: February 10, 1999
Paul Rosenberg, INDIVIDUALLY
/s/ Paul Rosenberg
------------------
Paul Rosenberg
ROSENBERG FAMILY LIMITED PARTNERSHIP
By: PBR, Inc., General Partner
By: /s/ Paul Rosenberg
------------------
Paul Rosenberg,
President
PBR, Inc.
By: /s/ Paul Rosenberg
------------------
Paul Rosenberg,
President
THE NEW MILLENNIUM CHARITABLE FOUNDATION
By: /s/ Paul Rosenberg
-------------------
Paul Rosenberg,
President
<PAGE>
EXHIBIT 1.9
AGREEMENT
This Agreement, dated as of January 25, 1999, among each of Paul Rosenberg
("Rosenberg"), Rosenberg Family Limited Partnership, a Pennsylvania limited
partnership, and The New Millennium Charitable Foundation (formerly The Mickey
Rubin Foundation), a Pennsylvania non-profit corporation (the "Foundation"),
severally and not jointly (each, a "Stockholder" and, collectively, the
"Stockholders"), and Tel-Save.com, Inc., a Delaware corporation ("Company").
WHEREAS, Company is a party to a certain Investment Agreement, dated as of
December 31, 1998 (the "Investment Agreement"), between Company and America
Online, Inc. ("AOL"), pursuant to which AOL purchased certain shares of Company
common stock, par value $.01 per share (the "Common Stock"), and Company has
agreed to reimburse AOL under certain circumstances if the market value of such
shares or of certain warrants to purchase Common Stock (such shares and such
warrants, referred to in the Investment Agreement as the "Shares" and the
"Warrants", respectively, herein the "AOL Securities") falls below certain
levels and under certain other circumstances, a portion of the obligations under
which are guaranteed by Daniel Borislow.
WHEREAS, each of the Stockholders recognizes and agrees that sales by it of
Shares (as defined below) under certain circumstances could adversely affect the
market price of the Common Stock (including the Shares of the other
Stockholders) and thereby increase the possibility that Company will be liable
for payments to AOL under the Investment Agreement and that such result is not
in the best interest of Company or the other Stockholders.
WHEREAS, the parties wish to provide for certain restrictions on the sale
of such Shares, for the mutual benefit of Company and the Stockholders.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
I. Stockholders Agreements. Each of the Stockholders agrees, severally and
not jointly, for the benefit of Company and of each other Stockholder, that:
A. Such Stockholder beneficially owns, as such term and concept are defined
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder (as now in effect
and based on present legal interpretations thereof), the shares of Common Stock
set forth by such Stockholder's name on Schedule A to this Agreement (but
including any shares of Common Stock acquired pursuant to a right referred to in
clause (i) of the first footnote to Schedule A, as to each Stockholder, "its
Shares").
<PAGE>
B. Without the express written consent of Company, such Stockholder shall
not, during the period beginning as of the date hereof and ending on (and
including) July 20, 1999 (the "Restricted Period"), directly or indirectly,
offer, sell, contract to sell (including, without limitation, any short sale),
pledge, transfer, assign, hypothecate, establish any "put equivalent position"
within the meaning of Rule 16a-1(b) under the Exchange Act, grant any option to
purchase or otherwise sell, encumber or dispose of (or publicly announce any
such transaction) any of its Shares; provided, however, that the restrictions
set forth in this Section I.B. shall not apply in the event that:
(a) Company has entered into (i) a merger agreement in which the
holders of the Common Stock prior to the merger would cease to hold a
majority of the voting securities of the surviving corporation, (ii) an
agreement to sell all or substantially all its assets, or (iii) an
agreement to be acquired, or to enter unto a business combination,
consolidation or any such similar transaction, in each case with any person
or entity other than a wholly owned subsidiary of Company; provided,
however, the restrictions shall (A) continue if the merger agreement is
with a majority owned subsidiary of Company and Company is to be the
surviving corporation in the merger or (B) be reinstated if such merger
agreement or other agreement referred to in clause (i), (ii) or (iii) is
subsequently terminated or the transactions contemplated thereunder are not
consummated; or
(b) a tender or exchange offer is made by any person, entity or 13D
Group (as defined below) (other than an Affiliate of, or any person or
entity acting in concert with, any of the Stockholders) to acquire Common
Stock or any other class of capital stock of Company with the right to vote
generally in the election of directors (the "Voting Securities") which, if
added to the Voting Securities (if any) already owned by such person,
entity or 13D Group, would result, if consummated in accordance with its
terms, in the Beneficial Ownership (as defined below) by such person,
entity or 13D Group of more than 50% of all Voting Securities of Company
then outstanding, provided that the restrictions shall be reinstated if
such tender or exchange offer is withdrawn or terminated without such
person, entity or 13D Group acquiring such 50% ownership level;
and provided, further, however, that (i) a Stockholder may transfer its Shares
to another entity controlled by Rosenberg, provided that the certificate for
such Shares continues to bear the legend referred to in Section C, below, such
Shares continue to be Beneficially Owned by Rosenberg and no filing under the
Exchange Act is required solely by reason of such transfer, and (ii) the
Foundation may sell, assign, transfer or otherwise dispose of up to an aggregate
of 50,000 of its Shares during the period beginning on February 22, 1999 and
ending on (and including) April 23, 1999 (the "Foundation Exception Period").
For purposes of this Agreement, the term "13D Group" means any group of persons
or entities formed for the purpose of acquiring, holding, voting or disposing of
Voting Securities that would be required under Section 13(d) of the Exchange Act
and the rules and regulations thereunder (as now in effect and based on present
legal interpretations thereof) to file a statement on Schedule 13D with the SEC
as a "person" within the meaning of Section 13(d)(3) of the Exchange Act; the
term "Beneficial Ownership" or any like expression with respect to any
securities means having
<PAGE>
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
C. Such Stockholder shall promptly surrender to Company all certificates
evidencing any of its Shares to permit the following legends to be placed on
each such certificate:
(1) On all certificates except the certificate for 50,000 of the
Foundation's Shares referred to in clause (2), below:
"The shares represented by this certificate are subject to the terms and
provisions of an Agreement, dated as of January 25, 1999, between the registered
holder hereof, Tel-Save.com, Inc. and certain other stockholders of
Tel-Save.com, Inc., a copy of which Agreement is on file at the principal
offices of Tel-Save.com, Inc. and such shares may only be sold, transferred,
pledged, encumbered or otherwise disposed of in accordance with the terms
thereof, provided that such limitations cease to be of any further force and
effect on and after July 21, 1999 and this legend may be removed at any time on
or after July 21, 1999."
(2) On one of the certificates for 50,000 of the Foundation's Shares (it
being understood that the Foundation's certificate for 100,000 Shares will be
exchanged for two (2) certificates representing 50,000 Shares each):
"The shares represented by this certificate are subject to the terms and
provisions of an Agreement, dated as of January 25, 1999, between the registered
holder hereof, Tel-Save.com, Inc. and certain other stockholders of
Tel-Save.com, Inc., a copy of which Agreement is on file at the principal
offices of Tel-Save.com, Inc. and such shares may only be sold, transferred,
pledged, encumbered or otherwise disposed of in accordance with the terms
thereof, provided that such limitations cease to be of any further force and
effect on and after July 21, 1999 and this legend may be removed at any time on
or after July 21, 1999, and provided, further, that such limitations do not
prevent the sale, assignment, transfer or other disposition of the shares
represented by this certificate during the period beginning on February 22, 1999
and ending on (and including) April 23, 1999."
D. Company shall be permitted to place, and maintain throughout the
Restricted Period, an appropriate stop transfer order with the transfer agent
for the Common Stock with respect to the Shares and the restrictions provided by
this Agreement (including an exception for the sale by the Foundation of up to
50,000 of its Shares during the Foundation Exception Period).
II. Specific Performance. The parties hereto acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that monetary damages would not afford an adequate
remedy. In furtherance of the foregoing, the parties acknowledge and agree that
they shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
they may be entitled by law or equity.
<PAGE>
III. Removal of Existing Legends
A. Company agrees that it will direct the transfer agent for the Common
Stock to remove the legends currently on the certificates representing the
Shares with respect to limitations on the sale of such Shares by reason of the
Securities Act of 1933, as amended (the "Securities Act") (but not the legends
(the "Resale Legends") provided for in Section II hereof, which shall remain on
the certificates for the Shares until the end of the Restricted Period or, in
the case of the Foundation's Shares, if and when such Shares are sold during the
Foundation Exception Period as and to the extent permitted by the terms of this
Agreement), promptly upon receipt by Company of an opinion, in form reasonably
satisfactory to it, of counsel reasonably acceptable to Company (it being
understood that Ballard Spahr Andrews & Ingersoll, LLP is acceptable to Company)
to the effect that the Shares represented by such certificate can be sold
publicly without registration under the Securities Act and without compliance
with the requirements of Rule 144 under the Securities Act (including by reason
of Rule 144(k) thereof).
B. Company agrees that it will direct the transfer agent for the Common
Stock to remove the Resale Legends from the certificates representing the Shares
at and as of the end of the Restricted Period.
IV. General
A. This Agreement may not be amended except by an instrument in writing
signed by each of the parties hereto, provided that nothing herein shall limit
the ability of Company to consent, in its sole discretion, to any exception from
the restrictions of Section I.B. hereof as to any of the Stockholders (which
need not include all such Stockholders).
B. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly delivered when delivered
personally, mailed by certified or registered mail, postage prepaid, or
delivered by telecopier, addressed as follows (or at such other address as any
party may have furnished to the others in accordance herewith):
If to the Stockholders, at their respective addresses and telecopier
numbers set forth below their signatures on the signature pages hereof, with a
copy to:
Rhonda R. Cohen, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
Telephone: (215) 864-8617
Telecopier: (215) 864-8999
<PAGE>
If to Company, to:
Tel-Save.com, Inc.
6805 Route 202
New Hope, Pennsylvania 18938
Attention: General Counsel
Telephone: 215-862-1500
Telecopier: 215-862-1515
C. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more of the counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
D. This Agreement (i) constitutes the entire agreement and supersedes all
prior agreements and understandings, written and oral, between Company, on the
one hand, and any of the Stockholders, on the other hand, with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
E. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
therein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TEL-SAVE.COM, INC.
By: /s/ Aloysius T. Lawn, IV
------------------------
Name: Aloysius T. Lawn, IV
Title: General Counsel and Secretary
/s/ Paul Rosenberg
- ------------------
Paul Rosenberg
650 N.E. 5th Avenue
Boca Raton, Florida 33432
Telephone:
Telecopier:
Rosenberg Family Limited Partnership
By: PBR, Inc., as General Partner
By: /s/ Paul Rosenberg
------------------
Name: Paul Rosenberg
Title: President
1407 Fox Place
West Chester, Pennsylvania 19382
Telephone:
Telecopier:
The New Millennium Charitable Foundation
By: /s/ Paul Rosenberg
------------------
Name: Paul Rosenberg
Title: President
c/o Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street
51st Floor
Philadelphia, Pennsylvania 19103
<PAGE>
SCHEDULE A
SHARES BENEFICIALLY OWNED*
Stockholder Number of Shares
- ----------- ----------------
Paul Rosenberg 5,485,700**
Rosenberg Family Limited Partnership 5,370,700
The New Millennium Charitable Foundation 100,000
- --------------------
*In each case excluding (i) shares acquirable upon exercise of rights
distributed by Company as a dividend to holders of record on December 31, 1998
and (ii) 1,754,300 shares sold by Rosenberg Family Limited Partnership between
December 28, 1998 and January 12, 1999 (which transfers have not yet been
recorded by the transfer agent).
**Includes shares shown as beneficially owned by Rosenberg Family Limited
Partnership and The New Millennium Charitable Foundation.
