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EXHIBIT 10.5
STOCK REDEMPTION AGREEMENT
AGREEMENT, made this 18th day of July, 1997, by and between 800 TRAVEL
SYSTEMS, INC., a Delaware corporation having offices at 0000 Xxxx Xxxxxxx,
Xxxxx 000, Xxxxx, Xxxxxxx 00000 (the "Company"), and XXXX XXXXX, an individual
residing at Xxxxxxxxx Xxxx, 00 Xxxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx 00000 (the
"Shareholder").
W I T N E S S E T H
WHEREAS, the Shareholder is currently the beneficial and record holder
of 72,500 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), and upon completion of the contemplated public offering of
1,800,000 shares of the Company's Common Stock (the "IPO") shall be entitled to
receive additional shares of Common Stock (collectively, the "Shares"); and
WHEREAS, the Company and the Shareholder mutually desire that the
Company redeem all, and not less than all, of the Shares of Common Stock
currently held by the Shareholder and which the Shareholder will be entitled to
receive upon completion of the IPO on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and other good and valuable considerations hereinafter contained, the
parties hereto agree as follows:
1. Additional Shares. Notwithstanding the terms of the
prior agreements between the Shareholder and the Company, upon completion of
the IPO the Company shall issue to the Shareholder 12,500 shares of its Common
Stock (collectively, with the 72,500 shares currently held by the Shareholder,
the "Shares"). The issuance to the Shareholder of the 12,500 shares of Common
Stock provided for herein shall be deemed to satisfy all of the Company's
obligations to issue shares to the Shareholder pursuant to the anti-dilution
provisions of the existing agreements between the parties, provided, however,
the Company shall issue additional shares to the Shareholder if the warrants
included in the IPO are exercised or the Company issues additional shares not
contemplated by the IPO within 90 days of the closing of the IPO.
2. Redemption and Redemption Price. Subject to the conditions
set forth in paragraph 5 of this Agreement, at the Closing (as hereinafter
defined) the Company shall redeem from the Shareholder all, but not less than
all, of the Shares at a redemption price (the "Redemption Price") of Three
Dollars and Seventy-Five Cents ($3.75) per share, for an aggregate redemption
price of $318,750.
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3. Closing.
(a) Date, Time and Place. Subject to the provisions of
paragraphs 5(a) and 6 of this Agreement, the closing of the redemption
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 and shall occur simultaneously with the closing of the Company's
contemplated initial public offering of 1,800,000 shares of the Company's
Common Stock (the "IPO").
(b) Deliveries. At the Closing: (i) the Shareholder
shall sell, transfer and deliver the Shares to the Company, surrender and
deliver to the Company all certificates representing the Shares or any portion
of the Shares, together with stock powers separate from certificates, duly
endorsed in blank by the Shareholder, and deliver to the Company the
certificate required by paragraph 5(d) hereof; and (ii) the Company shall pay
to the Shareholder the Redemption Price, in full, in lawful money of the United
States of America, by causing a wire transfer of the Redemption Price to be
delivered by the clearing agent for the representative for the underwriters to
such bank account as shall be designated by the Shareholder for such purpose,
and shall deliver to the Shareholder the certificate required by paragraph 5(c)
hereof.
4. Representation and Warranties.
(a) The Company represents and warrants to the
Shareholder that:
(i) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(ii) The Company has full corporate power and
authority and has taken all corporate action necessary to authorize, execute
and deliver this Agreement and to consummate the transaction contemplated
hereby; and this Agreement has been duly executed and delivered by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency, moratorium
and similar laws affecting the enforcement of creditors' rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought;
(iii) Neither the execution and delivery of this
Agreement, nor the consummation of the transaction contemplated hereby, does or
will violate any provision of the Company's Certificate of Incorporation or By-
laws, or violate or result in the breach of any agreement or any federal or
state law, rule, regulation, judgment, decree or order of any governmental
authority or court to which the Company is subject or by which it is bound;
(iv) The capital of the Company is, and at the
Closing will be, in excess of the Redemption Price, and the payment of the
Redemption Price will not impair the Company's capital; and
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(v) The Shares have been duly authorized and
validly issued to the Shareholder and are non-assessable.
(b) The Shareholder represents and warrants to the
Company that:
(i) He is the sole beneficial and record holder
of the Shares, and has not granted or sold any options or other rights to
purchase any of the Shares to any individual, person or entity, other than to
the Company under this Agreement;
(ii) The Shares are not subject to any liens or
other encumbrances, and at the Closing will be delivered free and clear of the
same;
(iii) Neither the execution and delivery of this
Agreement nor the consummation of the transaction contemplated hereby does or
will violate or result in the breach of any agreement or any federal or state
law, rule, regulation, judgment, order or decree of any governmental authority
or court to which the Shareholder is subject or by which he is bound;
(iv) This Agreement has been duly executed and
delivered by the Shareholder and is a valid and binding obligation of the
Shareholder enforceable in accordance with its terms, except as may be limited
by bankruptcy, insolvency, moratorium and similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification
that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought; and
(v) The shares referred to in the Preamble
hereto represent all of the shares which the Shareholder is entitled to receive
pursuant to the various agreements between the Shareholder and the Company,
and, subject to the closing of the IPO as contemplated by the Company's
registration statement filed with the Securities and Exchange Commission on
June 2, 1997, and payment for the Shares as contemplated hereby, the
Shareholder hereby releases the Company from any claims it has against the
Company for any additional shares of capital stock of the Company.
5. Conditions to Closing. The obligations of the parties to
consummate the transaction contemplated by this Agreement shall be subject to
satisfaction, on or before the Closing, of each of the following conditions
unless waived in writing by the party to be so satisfied:
(a) The IPO shall have been consummated and closed and
the Company shall have wired the Redemption Price to the Shareholder;
(b) The representations and warranties of each of the
Company and the Shareholder contained herein shall be true and accurate in all
material respects as of the date when made and at and as of the Closing as
though made at and as of such date;
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(c) The Company shall have furnished to the Shareholder a
certificate of the Company's President to the effect that: (i) the IPO has been
consummated, and (ii) all representations and warranties of the Company
contained in this Agreement are true and accurate in all material respects at
and as of the Closing; and
(d) The Shareholder shall have furnished to the Company
his certificate to the effect that all representations and warranties of the
Shareholder contained in this Agreement are true and accurate in all material
respects at and as of the Closing.
6. Termination. Anything contained in this Agreement to the
contrary notwithstanding, in the event the IPO has not been consummated and
closed on or before September 30, 1997, then either party may, upon not less
than two (2) weeks' prior written notice, terminate this Agreement.
7. Notices. Any notice given or required to be given pursuant to
this Agreement shall be in writing and shall be deemed given three (3) days
after being deposited in the U.S. Mail, first-class postage prepaid, addressed
to the parties at the respective address first above written or such other
address as may be established by written notice given in accordance with the
provisions of this paragraph 7.
8. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof,
supersedes all prior such agreements whether written or oral, and may not be
amended or otherwise modified except by a subsequent written instrument duly
executed by the parties hereto.
(b) No Waiver. No delay or failure by either party to
exercise any right hereunder, and no partial or single exercise of any such
right, shall constitute a waiver of that right or any other right, unless
expressly waived in writing.
(c) Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
giving effect to the conflict of laws provisions thereof.
(d) Binding Effect. The provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective successors, representatives and assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
800 TRAVEL SYSTEMS, INC.
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Xxxx X. Xxxxxxxx
President
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XXXX XXXXX
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