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EXHIBIT 10.29
AMENDMENT TO AGREEMENT
This AMENDMENT to AGREEMENT (this "Amendment") is entered into as of
the ___ day of August, 1997, by and between 800 TRAVEL SYSTEMS, INC., a
Delaware corporation with an address at 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000 (the "Company"), and XXXXX XXXXXXXX, an individual with an
address at 00 Xxxxxx Xxxxx, Xxxxx Xxxx, Xxx Xxxx 00000 ("Stockholder").
R E C I T A L S
On June 2, 1997, the Company filed a registration statement on Form
SB-2 (as such document may hereinafter be amended or supplemented, the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") with respect to the proposed initial public offering of its securities
(the "IPO"), which the Company currently contemplates completing with First
London Securities Corporation as the representative of the underwriters (First
London Securities Corporation or its replacement being referred to herein as
the "Representative").
On May 30, 1997, Stockholder and the Company entered into an agreement
(the "Agreement") with respect to (i) the registration of and restriction on
sale imposed on shares of the common stock, par value $.01 per share, of the
Company (the "Common Stock") held by Stockholder (the "Shares"); (ii) the
issuance by the Company to Stockholder of warrants to purchase 300,000 shares
of Common Stock (the "Warrants"); and (iii) the repayment of certain
indebtedness owing from the Company to Stockholder.
Stockholder and the Company now wish to amend certain provisions of the
Agreement.
NOW, THEREFORE, in consideration of the premises hereof and the
consideration set forth herein, the parties hereto agree to amend the Agreement
as follows:
A. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the same respective meanings herein as in the Agreement.
B. Section 1.1. The Agreement is hereby amended by deleting Section
1.1 thereof in its entirety and inserting the following new Section 1.1 in lieu
thereof:
"SECTION 1.1. Purchase of Certain Shares. In the event that the
Representative exercises the entire over-allotment option with
respect to the IPO (the "Over-allotment Option"), then, within five
(5) business days after the closing of the sale of the Company's
securities pursuant to the Over-allotment Option, the Company shall
redeem from Stockholder 250,000 Shares at a redemption price of $4.00
per Share payable by wire transfer of immediately available funds. It
is specifically understood and agreed that the Company shall have no
obligation to Stockholder to redeem any Shares in the event that the
Representative does not exercise its Over-allotment Option in full."
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C. Section 1.2. The Agreement is hereby amended by deleting Section
1.2 thereof in its entirety and inserting the following new Section 1.2 in lieu
thereof:
"SECTION 1.2. Registration of Certain Shares. In connection with the
IPO, the Company shall exercise its best efforts to cause 110,000
Shares (which shall include the 60,000 Shares issued to Stockholder on
January 22, 1997) to be registered for sale pursuant to the
Registration Statement (the Shares so registered being referred to
herein as the "Registered Shares"); provided, however, that
Stockholder shall not, directly or indirectly, sell, offer to sell,
grant an option for the sale of, assign, transfer, pledge,
hypothecate, or otherwise encumber or dispose of (collectively,
"Sell") any of the Shares so registered for a period of 15 days from
the date of the closing of the IPO (the "IPO Closing")."
D. Section 1.3. The Agreement is hereby amended by deleting Section
1.3 thereof in its entirety and inserting the following new Section 1.3 in lieu
thereof:
"SECTION 1.3. Sale of Remaining Shares.
(a) In the event that the Representative exercises the
Over-allotment Option in full, the Company and Stockholder
hereby agree that:
(i) Stockholder shall not Sell fifty percent (50%) of the
Registered Shares (55,000 Registered Shares) for a
period of six (6) months after the IPO Closing, it
being understood that Stockholder may Sell the
remaining fifty percent (50%) of the Registered
Shares immediately upon registration, subject only to
the 15-day lock-up provision in Section 1.2; and
(ii) Stockholder shall not Sell 50,000 of the 120,000
Shares not being redeemed pursuant to Section 1.1. or
registered pursuant to Section 1.2 (the "Unregistered
Shares") for a period of one (1) year after the IPO
Closing, and shall not Sell another 50,000 of the
Unregistered Shares for a period of 18 months after
the IPO Closing, it being understood and agreed that
Stockholder may Sell the remaining 20,000
Unregistered Shares at any time, pursuant to and in
accordance with the limitations set forth in Rule 144
under the Securities Act of 1933, as amended, or any
successor rule then in effect ("Rule 144")."
(b) Unless and until the Representative exercises the
Over-allotment Option in full (in which case Stockholder's
right to Sell its Shares shall be governed by Section 1.3(a)
above), the Company and Stockholder hereby agree that:
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(i) Stockholder shall be permitted to Sell not more than
10,000 Registered Shares during the first 15-day
period following the 15-day lock-up period referred
to in Section 1.2 and 20,000 Registered Shares in
each of the five (5) consecutive 30-day periods
thereafter, it being acknowledged and understood that
the Company has no discretion over the timing of the
Representative's exercise of the Over-Allotment
Option within the 45 days granted to it; provided,
that if Stockholder does not Sell all of the
Registered Shares which may be sold by him during any
15- or 30-day period, such Registered Shares may be
added to those which may be Sold during a subsequent
30-day period. By way of illustration, and not of
limitation, if the Representative exercises its
Over-Allotment Option on the 44th day after the IPO
Closing, Stockholder will have been permitted to Sell
only 10,000 Registered Shares in the 15-day period
following the 15-day lock-up period (ending on the
30th day after the IPO Closing) and an additional
20,000 shares in the subsequent 30-day period (ending
on the 60th day after the IPO Closing); but, as a
result of the exercise of the Over-Allotment Option
in full, from and after the 44th day after the IPO
Closing, Stockholder's right to Sell will be
determined pursuant to Section 1.3(a)(i) above;
(ii) with respect to the Private Placement Shares,
Stockholder shall comply with the "lock-up"
provisions provided for in the Subscription Agreement
pursuant to which they were purchased, such that
Stockholder shall not Sell 50,000 of such Private
Placement Shares for a period of six (6) months after
the IPO Closing, it being understood that Stockholder
may Sell the remaining 50,000 Private Placement
Shares immediately pursuant to and in accordance with
the limitations set forth in Rule 144.
Stockholder shall be permitted to Sell any Shares whose sale
is not restricted pursuant to the foregoing clauses (i) or
(ii) pursuant to and in accordance with the limitations set
forth in Rule 144.
(c) The Company will respond promptly and in good faith to any
request from Stockholder for the removal of legends from the
certificates representing any Shares to permit their sale as
provided herein."
E. Section 3.1. The Agreement is hereby amended by deleting Section
3.1 thereof in its entirety and inserting the following new Section 3.1 in lieu
thereof:
"SECTION 3.1. Extension of Maturity. The Company acknowledges and
agrees that it is indebted to Stockholder in the aggregate principal
amount of Two Hundred Fifty Thousand Dollars ($250,000) (the
"Indebtedness"). Within two (2) business days after the execution and
delivery of this Amendment, the Company shall pay to Stockholder by
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check sent via FedEx (or similar nationally-recognized overnight
courier service) to the address set forth above, all amounts of
interest currently due or past due in respect of the Indebtedness,
with interest thereon calculated at twelve (12%) percent per annum
through May 31, 1997 and eighteen percent (18%) per annum thereafter.
Notwithstanding anything to the contrary set forth in the notes
evidencing the amounts due Stockholder (the "Promissory Notes"),
Stockholder agrees to extend the maturity date of each of the
Promissory Notes to the earlier to occur of (i) November 30, 1997 or
(ii) the IPO Closing (the "New Maturity Date"), and change the rate of
interest due thereunder to eighteen percent (18.0%), which shall be
payable monthly. In addition, the Promissory Notes are hereby
amended, if required, to provide that the failure of the Maker to pay
any principal amount when due shall also constitute an Event of
Default thereunder. All amounts of principal and interest due under
the Promissory Notes shall be payable on the New Maturity Date.
Except as provided in this Article III, all other terms and conditions
of the Promissory Notes shall remain in full force and effect."
F. Section 3.2. The Agreement is hereby amended by deleting Section
3.2 thereof in its entirety and inserting the following new Section 3.2 in lieu
thereof:
"SECTION 3.2. Default. In the event that the Company shall fail to
pay when due any of its obligations under the Promissory Notes on the
New Maturity Date, the Security Agreement attached as Exhibit B to the
Agreement creating a lien on the Company's telephone system in favor
of Stockholder shall become effective and enforceable as of the date
of such default. The Security Agreement, along with the UCC-1
Financing Statements referred to therein, are being executed
simultaneously with the execution and delivery of this Amendment and
delivered to Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP, as escrow
agent pursuant to and in accordance with the terms of the escrow
agreement attached hereto as Exhibit 1."
G. Execution and Delivery of the Warrant. Simultaneously with the
execution and delivery of this Amendment, the Company shall deliver to
Stockholder the signed Warrant.
H. No Other Amendments. Except as specifically amended hereby, the
Agreement and all of the provisions thereof shall continue in full force and
effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
800 TRAVEL SYSTEMS, INC.
By:
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XXXXX XXXXXXXX
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