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EXHIBIT 10.27
RELEASE AND REDEMPTION AGREEMENT
This AGREEMENT (this "Agreement") is made and entered into as of this
4th day of September, 1997, by and between 800 TRAVEL SYSTEMS, INC., a Delaware
corporation with an address at Xxxxx 000, 0000 Xxxx Xxxxxxx, Xxxxx, Xxxxxxx
00000 (the "Company"), and XXXXXXX XXXXXX, an individual with an address at
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxx 00000 (the "Shareholder").
R E C I T A L S
WHEREAS, the Shareholder is currently the beneficial and record holder
of 481,609 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), and the Shareholder maintains that upon completion of the
contemplated public offering of shares of the Company's Common Stock (the
"IPO") he shall be entitled to receive additional shares of Common Stock;
WHEREAS a dispute has arisen between the Company and the Shareholder
regarding the Shareholder's right to receive additional shares of Common Stock
upon completion of the IPO; and
WHEREAS, the Company and the Shareholder mutually desire to resolve
such disputes as exist or may exist regarding the rights of Shareholder by
having the Company redeem all, and not less than all, of the shares of Common
Stock currently held by the Shareholder 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. Redemption and Redemption Price. Subject to the conditions
set forth in paragraph 4 of this Agreement, at the Closing (as hereinafter
defined) the Company shall redeem from the Shareholder all, but not less than
all, of the 481,609 Shares of Common Stock currently held by Shareholder (the
"Shares") at an aggregate redemption price (the "Redemption Price") of
$2,133,750 or Four Dollars and Forty-Three Cents ($4.43) per share.
2. Closing.
A. Date, Time and Place. Subject to the provisions of
paragraphs 4(a) and 5 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 IPO.
Pursuant to a letter agreement dated July 22, 1997 by and among the Company,
the Shareholder and Xxxx Xxxxx (the "Letter Agreement"), the closing of the IPO
and the Closing hereunder shall occur at the same place, and the Shareholder is
entitled to attend the closing of the IPO.
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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 4(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 4(c) hereof.
3. 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
(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;
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(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.
4. 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;
(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;
(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; and
(e) The Company and the Shareholder shall have each
delivered to the other a General Release in form and substance reasonably
satisfactory to each.
5. Termination. Anything contained in this Agreement to the
contrary notwithstanding, in the event the IPO has not been consummated and
closed on or before December 31, 1997, then either party may, upon not less
than two (2) weeks' prior written notice, terminate this Agreement.
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6. 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, by postage prepaid certified mail,
return- receipt requested, 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 6, with copies
if to Stockholder, to:
Singer & Xxxxxxxx LLP
00 Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
and to:
Xxxxxx Xxxxxx, Esq.
x/x xxx Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx
Xxxxx 0
0000 Xxxxx 00 Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
and, if the to Company, to:
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. XxXxxx, Esq.
7. Miscellaneous.
(a) Entire Agreement. Other than the Letter 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. Without limiting the
generality of the foregoing this Agreement supersedes the Stock Redemption
Agreement between the parties entered into on the 18th day of July, 1987.
(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.
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(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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
800 TRAVEL SYSTEMS, INC.
By:
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XXXXXXX XXXXXX
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