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EXHIBIT 10.33
RESCISSION/REACQUISITION SETTLEMENT AGREEMENT
THIS RESCISSION/REACQUISITION SETTLEMENT AGREEMENT (the "Agreement") by
and among TELESERVICES INTERNET GROUP INC., a Florida corporation, ("TIGI"), the
TARGET STOCKHOLDERS, consisting of Xxxxx X. Xxxx, Fernur Ece Nihat, The Xxxxx
Xxxxx Qualified Subchapter S Trust No. 1, Xxxxx X. Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx Del Xxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxx, and Xxxxxxx X. XxXxxxxxxx, and
THE AFFINITY GROUP, INC., a Florida corporation, ("Affinity") is entered into by
TIGI, the Target Stockholders and Affinity on this 28th day of February 2001.
TIGI and the Target Stockholders and Affinity may be referred to collectively
herein as the "Parties."
Premises:
On or about November 29, 2000, the Parties and TSIG Newco, Inc.
("Sub"), entered into an Agreement and Plan of Reorganization that provided for
a reverse triangular tax-free acquisitive reorganization of Affinity by TIGI
pursuant to Code Section 368(a)(1)(A) and Section 368(a)(2)(E) ("Acquisition
Agreement"). The transaction was closed on or about December 5, 2000, when
pursuant to the merger and plan of reorganization, Sub was being merged into
Affinity and all of Sub's outstanding shares of stock were converted into shares
of common stock of Affinity and the Target Stockholders surrendered all of the
outstanding shares of Affinity common stock solely in exchange for TIGI common
stock (the "Closing").
Section 8 of the Acquisition Agreement provides the Target Stockholders
with a right to rescind/reacquire/buy-back Affinity from TIGI, which right is
secured by a perfected security interest in all of the issued and outstanding
shares of Affinity common stock pursuant to a Stock Pledge Agreement ("Stock
Pledge Agreement") and executed Irrevocable Stock or Bond Power held by Xxxxx
Xxxx as Trustee for the Target Stockholders.
The Parties acknowledge: (a) That the Target Stockholders have served a
30-day notice (the "30-Day Notice") upon TIGI asserting their right to
rescind/reacquire/buy-back Affinity from TIGI by acquiring all of the issued and
outstanding shares of Affinity stock ("Affinity Shares") as provided in Section
8 of the Acquisition Agreement ("Rescission Right") and giving notice of their
exercise of the Rescission Right; (b) That prior to serving the 30-Day Notice,
Xxxxx X. Xxxx resigned as Chairman of the Board of Directors of TIGI, as a
director and member of the Board of Directors of TIGI, as President and CEO of
TIGI, as an employee of TIGI, and from any and all other offices and positions
with TIGI that he might have held prior to his resignation, and that Xxxxx X.
Xxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Del Xxxxx, Xxxxxx Xxxxxxx, Xxxxx
Xxxxx, and Xxxxxxx XxXxxxxxxx all resigned as officers of TIGI, from any and all
offices held by any and all of them, and have resigned from any and all
positions of employment held by each of them with TIGI, and further, Noyan Nihat
resigned as a consultant to TIGI and from any other positions or offices that he
may have held with TIGI; (c) That the Target Stockholders are entitled to the
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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Affinity Shares pursuant to the Stock Pledge Agreement; and (d) That the Parties
desire to avoid litigation with respect to the Acquisition Agreement and the
Stock Pledge Agreement and to permit the Target Stockholders to "acquire" the
"Affinity Shares," as the term and phrase in quotations is used in the Stock
Pledge Agreement, and believe that it is in their respective mutual best
interests to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, which shall be deemed
an integral part of this Agreement and not as mere recitals hereto, and in
consideration of the mutual agreements and covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:
1. Premises Confirmed and Ratified. The Parties mutually confirm and
ratify the facts, resignations and cancellation of the employment agreements and
consulting agreement as described in the foregoing premises, and TIGI waives its
30-day curative period under the Acquisition Agreement and waives all notices
and defenses to the Target Stockholders' exercise of their right to
rescind/reacquire/buy-back Affinity from TIGI as provided in Section 8 of the
Acquisition Agreement.
2. Affinity Director and CEO. Xxxxx X. Xxxx shall remain the sole
director of and the President and CEO of Affinity unless and until changed by
the Target Stockholders after they once again become the owners of all of the
issued and outstanding shares of stock of Affinity pursuant to this Agreement.
3. Rescission/Reacquisition. The Parties hereby agree that the
Acquisition Agreement and the Closing transactions pursuant thereto are
rescinded and/or that Affinity is hereby reacquired by the Target Stockholders,
effective immediately upon the execution and delivery of this Agreement.
4. Assignment of Affinity Shares. Pursuant to Section 8 of the
Acquisition Agreement, the Stock Pledge Agreement the Irrevocable Stock or Bond
Power executed by TIGI by and through its Secretary, Xxxx X. Xxxxx, assigning
and transferring to Xxxxx X. Xxxx, Trustee, One Hundred (100) shares of common
stock of Affinity issued to and standing in the name of TIGI on the books of
Affinity, and the premises set forth above, the Parties mutually hereby
authorize and direct Xxxxx X. Xxxx, Trustee, to assign and transfer absolutely
to the Target Stockholders, as their respective interests may appear, the One
Hundred (100) shares of common stock of Affinity issued to and standing in the
name of TIGI on the books of Affinity, which on this date and at this time
constitute the only shares of Affinity issued and outstanding, such assignment
and transfer to be effective immediately upon execution and delivery of this
Agreement by the respective Parties hereto.
5. Assignment of TIGI Shares. Pursuant to Section 8 of the Acquisition
Agreement and the premises set forth above, the Parties mutually authorize and
direct the Target Stockholders to assign and transfer absolutely to TIGI an
aggregate of Thirty-Five Million (35,000,000) shares of common stock of TIGI
issued to and standing in the name of the Target Stockholders on the books of
TIGI by delivery of stock certificates and medallion guaranteed stock powers,
endorsed in blank, as follows:
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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Xxxxx X. Xxxx 12,813,500 TIGI common shares
Xxxxx Xxxxx Qualified
Subchapter S Trust No. 1 7,031,500 TIGI common shares
Xxxxx Xxxxx 1,827,000 TIGI common shares
Fernur Ece Nihat 7,031,500 TIGI common shares
Xxxxxx Xxxxxx 1,725,500 TIGI common shares
Xxxxxx Xxxxxxx 1,725,500 TIGI common shares
Xxxxxxx Del Corso 1,725,500 TIGI common shares
Xxxxx Xxxxx 560,000 TIGI common shares
Xxxxxxx X. XxXxxxxxxx 560,000 TIGI common shares
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Total 35,000,000 TIGI common shares
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6. Cancellation of Warrants. The warrants for TIGI common shares of
stock issued to the following persons in the following amounts of shares:
Xxxxxx Xxxxxxxx 220,000 TIGI common shares
Xxxxx Xxxxxx 220,000 TIGI common shares
Soydan Nihat 60,000 TIGI common shares
Xxx Xxxxx 25,000 TIGI common shares
Xx XxXxxxx 10,000 TIGI common shares
shall be returned to TIGI upon the execution and delivery of this Agreement by
all of the Parties.
7. Advances by Affinity to TIGI.
(a) Prior Loans and Advances. The parties acknowledge that Affinity has
outstanding loans, advances and inter-company transfers to TIGI totaling
$676,026.13 plus accrued interest ("Affinity's Prior Loans and Advances to
TIGI"), $416,026.13 of which is represented by a demand promissory note payable
to the order of Affinity made and delivered by TIGI as maker on or about
November 20, 2001. Of the remaining balance $260,000 not represented by a
promissory note, some was advanced prior to the Closing pursuant to the
Acquisition Agreement and some was advanced after the Closing.
(b) New Advances by Affinity to TIGI. In addition to Affinity's Prior
Loans and Advances to TIGI, Affinity will pay to or for the benefit of TIGI the
additional sum of $152,000.00 as follows:
$52,000.00 will be paid by Affinity to TIGI by 5:00 P.M. on
Friday, February 28, 2001;
$34,000.00 will be disbursed specifically to cover upcoming
premiums on TIGI's directors and officers' liability insurance coverage; and
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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$66,000.00 will be disbursed incrementally specifically to
cover salaries and reimbursable expenses of the TIGI two current employees and
associated payroll expenses, and cost of accountants and filing expenses for
preparation and filing of TIGI's next due 10(k) report to the SEC, such
disbursements to be in amounts and payable to the order of such persons as TIGI
may direct, and which will be spread out over the next two months.
(c) Consideration. The Parties agree that $412,000 of the foregoing
$828,026.13 shall be consideration for the transfer by TIGI to Affinity of the
assets described in paragraphs 12 and 13 below and other valuable consideration
from TIGI to Affinity. Accordingly, upon transfer of good title to such assets
from TIGI to Affinity, the said $412,000.00 shall be satisfied and shall no
longer be owed by TIGI to Affinity.
(d) Demand Promissory Note. The Demand Promissory Note in the principal
amount of $416,026.13 plus accrued interest, however, shall be remain due and
owing by TIGI to Affinity.
8. Assignment of Lease. TIGI shall execute and deliver to Affinity all
documents reasonably requested by Affinity to assign the lease of the office
space on the 10th floor of the Northern Trust building located at 000 0xx Xxxxxx
Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx (hereinafter the "Leased Premises"), to Affinity,
which assignment shall be effective immediately upon execution and delivery of
this Agreement, subject only to the consent of the Landlord. Upon receiving the
assignment of the Lease and consent of Landlord, Affinity agrees to save and
hold harmless TIGI from any duties, obligations and payments arising for periods
subsequent to the effective date of this Agreement. Nevertheless, TIGI shall
have the right to continue to use and occupy the office presently used and
occupied by Xxxx Xxxxx, subject to customary reasonable rules and terms, rent
free for the balance of the current term of the Lease.
9. Merchant Accounts. The merchant account(s) currently processing
Affinity and its subsidiaries credit card transactions will be switched back
from TIGI to Affinity, as will all of the reserves, including, without
limitation, the EPX Reserve.
10. Balance Sheets. Except as otherwise specifically provided in this
Agreement, the assets and liabilities of Affinity, including, without
limitation, its accounts receivable and accounts payable as they exist on the
effective date of this Agreement shall remain assets and liabilities of Affinity
after the effective date of this Agreement. Except as otherwise specifically
provided in this Agreement, the assets and liabilities of TIGI, including,
without limitation, its accounts receivable and accounts payable as they exist
on the effective date of this Agreement shall remain assets and liabilities of
TIGI after the effective date of this Agreement. Affinity shall have a right to
a copy of the signed audit of Affinity and its subsidiaries and the opinion
accompanying same, and TIGI shall deliver a copy of same to Affinity within two
days of receiving same itself.
11. Surviving Terms of Acquisition Agreement Superceded. All of the
terms, conditions, representations, warranties, and covenants of the Parties,
including, without limitation, the Transaction Indemnity and all other
indemnities and hold harmless covenants, contained in the
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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Acquisition Agreement including, without limitation, the schedules and exhibits
thereto and all collateral agreements executed and delivered at Closing
including, without limitation, the Personal Guaranty Indemnity Agreement that
survived the Closing shall be superceded by this Agreement, effective
immediately upon execution and delivery of this Agreement by all of the Parties.
The foregoing notwithstanding, TIGI shall indemnify and save and hold harmless
Affinity and the Target Stockholders from liability for any finders fee due in
connection with the Acquisition Agreement.
12. Transfer of IVR Equipment Lease and Other Equipment. TIGI shall
execute and deliver to Affinity immediately upon execution of this Agreement all
documents reasonably requested by Affinity to assign to Affinity all of TIGI's
right, title and interest in a lease of certain equipment generally described as
a "Lucent Technologies Convergis Interactive Voice Recognition system,"
including all software associated therewith (hereinafter collectively referred
to as the "IVR Equipment") and all other equipment listed on that certain Xxxx
of Sale and that certain Absolute Assignment Of Intangible Assets And Assumption
By Assignee Of Certain Obligations, dated as of even date herewith, and Affinity
shall assume all indebtedness and lease obligations of TIGI encumbering such
equipment, including the remaining debt in the approximate amount of $16,000.00
encumbering the Lucent G3 telephone switch, said instruments of transfer and
assumption to be effective immediately upon execution and delivery of this
Agreement and acceptance of same by Affinity, subject only to the consent of any
lessors. In addition, the Parties hereby agree that TIGI shall not assign or
otherwise transfer to Affinity the Rolm Phonemail Model #7654, SN #890 2098, but
rather the same shall remain will remain with TIGI, which is subject to a
security interest for a bank loan on which the present balance is approximately
$117,000.00.
Upon receiving said xxxx of sale and assignments hereunder, together
with any required consents of lessees, Affinity agrees to save and hold harmless
TIGI from any duties, obligations and payments arising for periods subsequent to
the effective date of such transfers.
13. Conveyance of Office Furniture and Equipment. TIGI conveys to
Affinity all of its right, title and interest in and to office furniture and
equipment of all type and description located in the Leased Premises (as
hereinbefore described), which transfer shall be effective immediately upon
execution and delivery of this Agreement. Upon accepting the assignment and
transfer to Affinity of the furniture and fixtures, Affinity shall assume the
obligation to pay the remaining debt in the approximate amount of $5,374.00 to
Xxxxx Xxxxxxx, the trustee for the VSI bankruptcy estate from whom TIGI
purchased some of such furniture.
14. Cancellation of Employment Agreements. The respective Employment
Agreements between TIGI and Xxxxx X. Xxxx, Xxxxx X. Xxxxx, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxxx, Xxxxxxx Del Xxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxx, and Xxxxxxx XxXxxxxxxx
and the Consulting Agreement between TIGI and Noyan Nihat are canceled effective
immediately upon execution and delivery of this Agreement, except that any
express releases and indemnities thereunder shall nevertheless survive such
cancellation.
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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15. Confidential Information. Each Party acknowledges that it may have
received information that is considered by another Party to be confidential or
proprietary, which information includes non-public financial information,
corporate books and records, certain databases and personal information about
the persons contained therein, TIGI's registered U.S. trademarks, and any
writing containing any of the foregoing ("Confidential Information"). The
Parties agree to maintain in confidence such Confidential Information unless or
until it shall have been made public through no fault of a Party other than the
Party who owns such Confidential Information. The Parties shall use reasonable
precautions to ensure that Confidential Information is reasonably protected from
unauthorized disclosure; provided, however, that a Party may disclose
Confidential Information upon order of a court or other authority with competent
jurisdiction to issue such an order, provided that such Party shall first notify
the Party who owns such Confidential Information, so that such party shall have
an opportunity to seek a protective order if such Party so desires.
16. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Party prior to making the
disclosure).
(b) Entire Agreement. This Agreement (and the agreements and documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(c) Succession and Assignment. This Agreement shall be binding upon and
shall inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing and will be effective when
hand-delivered or upon delivery if sent by commercial courier service such as
Federal Express or Airborne or on the day of delivery or first attempted
delivery if sent by first class, postage prepaid, certified United States mail,
return receipt requested (whether or not the return receipt is subsequently
received), and addressed by the sender:
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
Page 6 of 10
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If to the Target Stockholders and/or Affinity: Copy to:
Xxxxx Xxxx A. Xxxxxx XxXxxxx, Esq.
President and CEO Xxxxxxxx, Loop & Xxxxxxxx, LLP
The Affinity Group, Inc. Bank of America Plaza
000 0xx Xxxxxx Xxxxx, Xxxxx 0000 000 Xxxx Xxxxxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, XX 00000 Suite 2800
Xxxxx, XX 00000
If to the TIGI: Copy to:
Xxxx Xxxxx Xxxxx Xxxxx, Esq.
Secretary Futro & Xxxxxxxxxxx, LLC
TeleServices Internet Group Inc. 0000 - 00xx Xxxxxx, 00xx Xxxxx
000 0xx Xxxxxx Xxxxx, Xxxxx 0000 Xxxxxx, XX 00000
Xx. Xxxxxxxxxx, XX 00000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient.
Regardless of the method of delivery, any written notice, request, demand,
claim, or other communication actually received by a party hereto shall be
effective on the date of receipt. Any party hereto, from time to time, may
change his or her or its address to which notice is to be sent pursuant hereto
by sending a notice of such change in conformity with the foregoing requirements
to the other parties to the other parties to this Agreement.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Florida without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
(h) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time with the prior authorization of their
respective boards of directors; provided, however, that any amendment effected
subsequent to stockholder approval will be subject to the restrictions contained
in the Florida General Corporation Law. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by both
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(i) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
Page 7 of 10
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any situation in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
(j) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(k) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(l) Further Assurances. Each of the Parties shall promptly and without
cost to the other execute and deliver to Secured Party such other documents,
certificates, agreements and other writings and shall take such other actions as
may be requested by the other Party to implement the purposes of this Agreement,
including, without limitation, the perfection of the Target Stockholders'
rights, title and interest in the Affinity Shares.
(m) Non-Disparagement. The parties have not and shall not communicated,
directly or indirectly, any negative or disparaging comments or information
about each other or any of the current or former officers, directors, managers,
supervisors, executives, or representatives of TIGI or Affinity, or any
subsidiaries or affiliates of the same, concerning the reputation or status of
the other party's professional abilities, business, or financial condition. In
the event a Party is asked by a person inside or outside of TIGI or Affinity, or
any subsidiaries or affiliates of the same, about the circumstances giving rise
to this Agreement, the party may state words to the effect that the parties have
resolved any and all differences they may have had on an amicable basis.
(n) Prior Agreements. All prior agreements, if any, by and between any
of the Parties to this Agreement relating to acquisition of the Target by the
Parent are, by this Agreement, hereby terminated and revoked and are hereby made
null and void and of no further force or effect.
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
TeleServices Internet Group Inc.
By: /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, Secretary
The Affinity Group, Inc.
By: /s/ Xxxxx X. Xxxx
--------------------------------
Xxxxx X. Xxxx, President and CEO
Target Stockholders:
/s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx
/s/ Xxxxxx X. Xxxxx
------------------------------------
The Xxxxx Xxxxx Qualified Subchapter
S Trust No. 1
/s/ Xxxxx X. Voel
------------------------------------
Xxxxx X. Xxxxx
/s/ Fernur Ece Nihat
------------------------------------
Fernur Ece Nihat
/s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxxx XxxXxxxx
------------------------------------
Xxxxxxx Del Corso
/s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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/s/ Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxxx X. XxXxxxxxxx
------------------------------------
Xxxxxxx X. XxXxxxxxxx
Xxxxxx Xxxxxxx hereby executes this Agreement solely for the purpose of agreeing
to the cancellation of his Employment Agreement with TIGI:
/s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
Rescission/Reacquisition Settlement Agreement
TeleServices Internet Group, Inc.
The Affinity Group, Inc.
Target Stockholders
February 28, 2001
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