SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 23, 1998
800 TRAVEL SYSTEMS, INC
(Exact Name of Registrant as Specified in Charter)
Delaware 1-13271 59-3343338
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification No.)
4802 Gunn Highway, Tampa, Florida 33624
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, (913) 908-0903
Item 5. Other Events.
On March 23, 1998, 800 Travel Systems, Inc. (the "Company") purchased from
The Joseph Stevens Group, LLC ("JSG," the sole shareholder of the Joseph Stevens
Group, Inc. ("Stevens")), make-whole rights which, under certain circumstances,
would have obligated 800 Travel to issue an as-yet undetermined number of shares
of its stock to JSG in January 2000 (the "Make-whole Rights").
In January 1998, simultaneously with the Company's initial public
offering, Stevens was merged into the Company and JSG was issued 383,333 shares
of the Company's Common Stock, par value $.01 per share. The merger agreement
(the "Merger Agreement") set forth the Make-whole Rights which provided that if
on January 21, 2000, the value of the 383,333 shares issued to JSG under the
Merger Agreement and then held by JSG, together with the fair value of any
consideration received for shares no longer held by JSG, was less than
$2,571,429, the Company would issue to Stevens such additional shares, based
upon the stock's then bid price, as would make up the deficiency.
In addition to obtaining a release of the Make-whole Rights, as part of
the transaction, the Company repurchased 184,615 shares of its Common Stock from
JSG, and JSG agreed to refrain from selling its remaining shares of the
Company's Common Stock over the counter until January 1, 1999. The total
consideration paid for the 184,615 shares of common stock and release of the
Make-whole Rights was $558,000.
As a result of the release of the Make-whole Rights and the redemption of
184,615 shares formerly owned by JSG, the total consideration paid by the
Company for Stevens has been reduced from (a) approximately $1,800,000 plus
383,333 shares of Common Stock with a guaranteed value of $2,571,429 to (b)
$2,450,000 plus 198,718 shares of Common Stock with no guaranteed value.
As part of the transaction, the Company assumed certain obligations under
Stevens' lease agreements for telephone switching equipment and closed on JSG's
right to require the Company to acquire office equipment in the facility
formerly operated by Stevens and now maintained by the Company, in California.
JSG pledged 100,000 shares of the Company's Common Stock to secure JSG's
obligations to indemnify the Company from claims on the switching equipment.
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Item 7. Financial Information, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits
10.33 Agreement dated as of March 20, 1998 between The Joseph Stevens
Group, LLC and the Company
10.34 Pledge Agreement dated as of March 22, 1998 among The Joseph Stevens
Group, LLC, the Company and Phillips Nizer Benjamin Krim & Balloon
LLP
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
800 TRAVEL SYSTEMS, INC.
(Registrant)
Date: March 26, 1998 By: /s/ Mark D. Mastrini
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President and
Chief Operating Officer
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